‘Not COVID 2.0’: NZ PM Luxon upbeat on fuel crisis
New Zealand is going shopping for a fuel insurance quota after the government insists its stockpiles are “bona fide”.
Like all countries, New Zealand is struggling with the looming energy crisis resulting from US-Israeli attacks and retaliation against Iran.
It is particularly vulnerable to price and availability shocks, given that it imports all of its petroleum, diesel and jet fuel and is located at the end of its supply chain in the South Pacific.
Prime Minister Chris Luxon is no stranger to these challenges, given his past role as Air New Zealand chief executive.
“I’ve had fuel crises before in my previous life,” he told reporters in Wellington on Monday.
“I can tell you that trying to run an airline with 30 percent of the fuel you need for several months is not pleasant.
“So it’s really important to get our heads together in terms of the mindset of where this thing could go.”
The New Zealand government has also devised a four-stage escalation protocol for the crisis, which puts the country in the first “monitoring” phase.
Gasoline and diesel stocks in the country increased last week, reaching 27.9 days of gasoline, 21.7 days of diesel and 25.3 days of jet fuel.
Similar quantities of each fuel also reach New Zealand, giving Mr Luxon a degree of confidence.
“This is not COVID 2.0. People are not going to sit at home and bake sourdough,” he told Newstalk ZB.
“The kids are going to school. It’s business as usual right now.”
Mr Luxon said Kiwis should be “reassured” by the current situation.
“We are doing what we said we would do, which is safe fuel supply. We have sufficient stock,” he said.
“We are meeting our minimum stockholding obligations. We have not yet seen any indication from our oil importers that there are any difficulties or problems with this. That’s great.”
The government is exploring new diesel storage facilities at Marsden Point, an oil refinery due to close in 2022, as well as “additional stock taking by June”.
However, it will not follow Australia’s path of subsidizing fuel to ease cost-of-living concerns.
According to aggregator website Gasly, the average price for 91 liters of unleaded was NZ$3.42 ($A2.86) on Monday; This figure increased by 36 percent in March.
Diesel, on the other hand, rose 86 percent to NZ$3.44 (US$A2.82).
While the Australian government has announced a $2.55 billion plan to halve fuel duty for the next three months, Mr Luxon dismissed the option as bad policy.
“It’s poorly targeted. It actually benefits high-income households and encourages fuel use when it’s restricted,” he said.
“We are doing everything we can to minimize the effects of rising inflation and rising debt.”
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