Finance Minister Nicola Willis has been advised a meeting to discuss a potential move to phase two of the National Fuel Plan would not be required after a significant policy change in Australia, and a drop in New Zealand's total jet fuel stocks.
Earlier today, Australia Prime Minister Anthony Albanese announced the country would cut its fuel excise in half for three months to alleviate fuel costs.
Australia’s heavy-vehicle road user charge would also be cut to zero over the same period.
Under New Zealand’s National Fuel Plan, any significant policy changes in Australia or the International Energy Agency can trigger a shift in Aotearoa.
But after she sought advice from officials, Willis said a formal assessment of a move to phase two of the plan was not recommended over Australia’s changes.
The same advice was also given over a three-day drop-in overall jet fuel stocks – after the latest data was released by the Ministry of Business, Innovation and Employment today.
In-country stocks of jet fuel had increased, however.
“Officials have advised me none of these changes present a material change to fuel supply, and therefore they have not recommended a formal assessment meeting under the National Fuel Plan, and I can confirm that no such assessment meeting will be taking place at this time.”
Despite that, Prime Minister Christopher Luxon said "we are continuing to prepare for a move to phase 2 if we need to".
Govt to explore 'options' for additional fuel security
At the same time, Willis also announced Cabinet had agreed to explore additional options to access additional fuel security "over and above" existing minimum supply obligations.
She said this meant the Government was now "actively seeking proposals" for New Zealand refined fuel imports on arrangements "that would support additional purchase of stocks through to June".
“The proposals would involve the Government working with industry partners to deliver additional fuel from offshore to manage the risk of a shortage of supply.”
Willis said the Government had “already been approached by some parties with unsolicited proposals to increase supply”.
“We are now urgently progressing commercial assessment of those proposals.”
This included one specific proposal, Willis said, which involved swapping New Zealand’s fuel tickets it currently held by its International Energy Agency obligations.
“The swap would see that those crude oil and other stocks converted into usable fuel stocks, suitable to New Zealand’s needs, potentially stored offshore.
“Facilitating this and other proposals could include support for shipping costs, storage arrangements, underwrites or risk sharing arrangements.
“Our preference is financial arrangements which share the risk with the market.”
Willis the Government would remain “very careful” to manage the potential fiscal risks and costs with these approaches.
“Our goal is only to provide support where the risk is too high for private suppliers to source fuel on commercial terms without Government support.”
The Government would also remain committed to enforcing minimum fuel stock holding obligations by fuel companies.
What did Australia announce?
Drivers in Australia would save $0.26 (NZ$0.31) per litre at the pump for three months while the country’s fuel excise was cut in half.
This would start April 1, along with the temporary removal of its heavy-vehicle road user charge.
The Australian government said this would cost $2.5 billion (NZ$2.9 billion). Its treasurer, Jim Chalmers, did not elaborate on how the cost would be offset.
Australia’s national cabinet also had agreed to adopt its own fuel security plan – but at this stage, Albanese said every ship due to arrive in March had done so.
Separately at the state level, it was reported yesterday both Victoria and Tasmania would make public transport free to use to also alleviate fuel costs. This was not part of the reason Willis had sought advice.
NZ stocks
Meanwhile NZ's fuel stock levels have risen in the latest official update, with new data showing 15 tankers were either in local waters or heading for the country as officials continue work to reassure the public over supply.
The Ministry of Business, Innovation and Employment data, published this afternoon, showed an increase across petrol and diesel compared with the previous update.
Total petrol stocks climbed to 59.3 days of cover as of March 25, up from 48.7 days in the previous snapshot taken on March 22.
Diesel rose from 46.4 to 54.5 days, while jet fuel reduced slightly from 53.4 to 50.4 days.
The overall measure included both in-country and on-water data, meaning it included ships that might still be weeks away.
But in-country stocks also recovered slightly after hitting their lowest point this month in the March 22 data. Petrol on the ground rose from 24.5 to 27.9 days of cover, diesel climbed from 18.1 to 21.7 days, and jet fuel increased from 20.1 to 25.3 days.
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