The Government has temporarily eased fuel rules to allow petrol and diesel refined for Australia to be sold in New Zealand as it looks to reduce the risk of supply disruptions.
Associate Energy Minister Shane Jones announced the move at Monday's post-Cabinet press conference flanked by Prime Minister Christopher Luxon and Finance Minister Nicola Willis.
Jones said the change would give fuel importers access to a wider range of overseas shipments at a time when global fuel markets remain volatile.
"In a tight global fuel market, flexibility matters," he said.
"Countries that can access a wider range of shipments are better placed to keep fuel flowing."
The decision removed technical differences between New Zealand and Australian fuel specifications that could prevent fuel refined across the Tasman from being redirected for use here.
'Compatible with NZ vehicles', says Jones
"This removes unnecessary technical barriers and helps ensure New Zealand isn't excluded from available supply our neighbours are accessing," Jones said, adding that fuel companies have told the Government the change could allow them to secure shipments more quickly and from a broader pool of suppliers.
"Our fuel specifications are already very similar to Australia's," Jones said.
"Fuel refined to Australian standards is compatible with New Zealand vehicles and meets safety and quality expectations."
However, Jones said New Zealand would not, for now, follow Australia's decision to allow higher sulphur fuel. Australia relaxed sulphur limits so it could draw supply from its Brisbane refinery, which produced higher sulphur fuel.
"However, we will keep an eye on whether further changes to fuel specifications could open up further supply channels if necessary."
PM: 'Ensuring sufficient supply to keep NZ working'
Luxon said New Zealand’s immediate fuel supply remained secure, with sufficient stocks of petrol, diesel and jet fuel for at least the next seven weeks.
"There are healthy stocks of fuel in the country, with more on the way, and the market is operating as normal," Luxon said.
However, he said the Government was planning for possible future disruptions caused by the conflict in the Middle East and its impact on global fuel supply chains.
"Our first priority is ensuring that we have sufficient fuel supply to keep New Zealand working," Luxon said, pointing to diesel as critical for freight, farming and key industries.
The Finance Minister said officials were monitoring fuel stocks closely, with the latest data confirming more than six weeks' supply of diesel and jet fuel, and seven weeks of petrol – either in New Zealand or already en route.
"There is no cause for concern about fuel supplies in the short term," Willis said.
She said the Government was also focused on the rising cost of fuel and its impact on households and businesses, but again warned against broad-based support that could increase government debt or contribute to inflation.
"Borrowing large sums of money to insulate all New Zealanders from this conflict, a conflict that is not of our making, would increase debt and debt servicing costs, and potentially lead to a credit rating downgrade," Willis said.
Targeted, temporary relief to be announced on Tuesday – Willis
However, she confirmed the Government would shortly announce targeted, temporary support for low and middle income families most affected by fuel price increases, with details to be released on Tuesday.
She said announcements would be also made later in the week on how the National Fuel Plan applied in this scenario.
Speaking to Breakfast, Christopher Luxon didn’t have exact timing for any potential financial support package. (Source: Breakfast)
The temporary alignment with Australian specifications could remain in place for up to 12 months.
New Zealand imports all of its refined fuel following the closure of the Marsden Point refinery in 2022, leaving the country more exposed to global supply disruptions, shipping delays and refinery outages overseas.
Fuel specifications set the minimum technical and environmental requirements that petrol and diesel must meet before being sold domestically. The Government said existing requirements that fuel be "fit for common purpose", including suitability for New Zealand's climate, will continue to apply.
Jones said the move was intended as a short term resilience measure rather than a permanent change to fuel standards.
"This is a sensible, time limited step that gives importers access to a broader range of fuel shipments while global conditions remain uncertain," he said.
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