The Finance Minister is set to announce “targeted and temporary” assistance for families severely affected by rising fuel costs on Tuesday.
During a post-Cabinet briefing on Monday, Nicola Willis, together with Prime Minister Christopher Luxon and Associate Energy Minister Shane Jones, provided a preview of the upcoming measures.
Shane Jones revealed that New Zealand plans to align its fuel standards with those of Australia, permitting the importation of fuel intended for the Australian market.
Willis noted that while Cabinet has already decided on the support measures, the specifics are still being finalized. However, this will not delay the delivery of assistance to families.
“This conflict is affecting nearly all New Zealanders by driving up the prices of petrol, diesel, and jet fuel, which is already impacting our citizens and businesses. Sadly, the government cannot alleviate this burden for everyone,” she stated.
“Our strategy aligns with the Royal Commission of Inquiry’s findings on the Covid pandemic response, emphasizing the pitfalls of untimely, non-temporary, and non-targeted spending.”
Willis indicated that the timeline for rolling out the support would be clarified once the announcement is made.
She advised motorists to refuel as needed, explaining that the government aims to address income levels rather than fuel prices.
‘No concerns’ about fuel supply
Currently, there are no issues with fuel supplies in New Zealand, according to Willis.
“To date, all shipments have arrived as scheduled, and fuel importers have not expressed any concerns about upcoming shipments.
“However, we must be ready for potential medium- to long-term disruptions, especially since over 90 percent of our fuel is sourced from Southeast Asian refineries, which may face challenges in obtaining the necessary crude oil feedstock.”
Luxon stated that the country has at least seven weeks’ worth of fuel, but the government is preparing for possible long-term disruptions.
“For those facing a 30 percent rise in fuel bills or a 60 percent hike in diesel costs since this crisis began, the impact is tangible.
“We cannot repeat the mistakes made during Covid, where money was spent indiscriminately for short-term gain but led to long-term pain. We must ensure support is temporary and targeted.”
“Unfortunately, we cannot relieve the pressure of rising prices for everyone. Our support must be targeted, timely, and temporary, without increasing inflation or debt.”
According to the latest data from the Ministry of Business, Innovation and Employment, New Zealand has about 47 days’ worth of fuel, including 50 days of petrol, 46 days of diesel, and 45 days of jet fuel.
These figures, updated as of last Wednesday, reflect a decrease of about two days compared to the previous week.
One new fuel shipment arrived on Sunday, with two more expected in the next two weeks, collectively carrying enough fuel for another 20 days.
The next update is due on Wednesday, but the ministry reports that there is no current need for emergency measures under the national fuel plan.
Luxon clarified that New Zealand’s stance on the Iran conflict remains unchanged, emphasizing that the capture of ships to secure fuel and critical supplies is “unacceptable”.
“A swift resolution to this conflict is essential, and respecting civilians and infrastructure is crucial. We believe de-escalation is the best path forward.”
Willis confirmed that there has been some discussion on which industries might be prioritized if fuel rationing becomes necessary, but details will be disclosed later.
“While immediate action is not required, we will outline our response phases as it is beneficial for people to know potential scenarios,” she said.
She also pointed out that high prices are naturally curbing fuel consumption.
“The financial strain is influencing people’s decisions. Auckland public transport reported its highest usage day in seven years, likely due to people opting to drive less because of high costs.”
‘Anzac pact’ in fuel and other standards
Jones presented the government’s proposal to temporarily allow fuel that meets Australian standards to be available in New Zealand for up to a year.
Fuel companies have suggested that this could expedite securing shipments from a broader range of suppliers.
Jones stated that long-range vessels typically transport about 120 million litres, and New Zealand uses roughly 24 million litres of fuel daily—47 percent diesel, 35 percent petrol, and the rest aviation fuel.
“If a vessel bound for Australia is available, we could also benefit from its resources.”
He assured that fuel refined to Australian standards is suitable for New Zealand vehicles and meets safety and quality benchmarks, countering claims that it would introduce lower-quality fuels.
“It’s unfair to label our Australian counterparts negatively,” he remarked. “We’ve been advised that fuel used in northern Australia’s high-temperature environment is suitable for the North Island, and importers assure us they can supply both islands.”
He mentioned discussions with Australian officials.
“We advocated for exploring an ANZAC pact, and this is the first step towards collaboration.”
“There’s strong Cabinet support for moving towards permanent harmonization of these and other economic standards.”
Willis and the associate finance ministers will work on further improvements, he added.
The government has decided not to follow Australia’s relaxation of standards for higher-sulphur fuel, at least for now.
“Currently, that’s not our plan, but we will consider it if circumstances change and it could expand our supply options.”
