Government warns of growing fuel pressures as Middle East conflict drives price surge
Drivers are being urged not to panic-buy fuel as the Government monitors rising petrol prices and potential supply pressures linked to the escalating conflict in the Middle East.
Speaking at a media briefing, Finance Minister Nicola Willis said ministers were meeting daily to assess the situation and its potential impact on New Zealand’s economy and supply chains.
“There are three parts to our strategy,” Willis said. “The first is focused on supply chains, including critical goods, the second is about potential freight disruptions, and the third is about our economic response.”
Fuel is a major focus, alongside fertiliser, plastics and bitumen, as the government works with industry to ensure supplies remain secure.
According to the Ministry of Business, Innovation and Employment, New Zealand currently has 57 days of petrol supply, 49 days of diesel and 47 days of jet fuel, including stock already in the country and shipments on the way.
“Current orders are secure and we have normal levels of stock in the country and on the water,” Willis said.
However, motorists are already feeling the impact of rising global oil prices.
Fuel price monitoring app Gaspy says the average price of 91 petrol has jumped about 20 percent since the start of March, pushing prices above $3 per litre in some areas.
Willis said petrol prices had risen about 46 cents per litre, adding roughly $23 to the cost of filling an average car.
Diesel prices have climbed even more sharply, increasing about 72 cents per litre, which adds around $36 to the cost of filling an average diesel vehicle.
“We are acutely conscious of the impact this will be having for many New Zealanders,” she said.
While prices remain slightly below their 2022 peak, Willis warned they could rise further if the conflict continues.
“If the conflict is prolonged, there could be a point in the future at which fuel importers do face challenges securing orders,” she said.
New Zealand imports most of its refined fuel from Asia, which in turn rely heavily on Middle Eastern crude oil.
If disruptions continue, those refineries may need to source oil elsewhere, while New Zealand importers could also seek alternative suppliers.
Under the Government’s National Fuel Plan, officials are working closely with fuel companies through a sector coordinating group to monitor supply risks and respond quickly if problems arise.
“There is a role for diplomacy here,” Willis said, noting the Government could look at widening fuel specifications to allow importers to source fuel from more regions, or work with partners to secure shipping options if needed.
At the same time, ministers are watching for wider disruptions to global shipping routes that could affect exporters and importers.
Officials from the Ministry for Primary Industries have already worked to redirect some food exports that were originally heading to the Middle East, arranging new food safety certifications so shipments can enter alternative markets.
Cold storage cooperation has also been expanded to prevent perishable goods from spoiling if shipping delays occur.
The Government is also preparing for possible cost-of-living pressures if global energy prices remain high.
Willis said she had spoken with the chief executives of New Zealand’s major banks, who indicated they would support affected businesses through any economic disruption.
From the Government’s perspective, any assistance for households would need to be temporary, targeted and timely.
Officials have advised that reducing the fuel excise tax — a measure used during the 2022 global fuel price spike — would not be appropriate at this stage.
“Reducing fuel excise would send the wrong signal and would not be sufficiently targeted,” Willis said.
Meanwhile, Enery Minister Simon Watts is attending the Indo-Pacific Energy Security Ministerial and Business Forum in Japan, where energy supply resilience is a key focus.
Watts said the Middle East conflict has highlighted the importance of international cooperation to maintain stable fuel supply chains.
“While the conflict continues to disrupt international oil markets, New Zealand is prepared for a disruption to fuel supply,” he said.
“Our fuel system is resilient, our stocks are healthy, and our plans are built precisely for moments like this.”
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