Prime Minister Christopher Luxon says fuel importers have assured the Government that shipments to New Zealand are secured through May, as the crisis in the Strait of Hormuz remains far from resolved.
New data published this afternoon showed the country's fuel stocks had dipped slightly.
Total cover sat at 59.7 days of petrol, 49.1 days of diesel and 50.7 days of jet fuel – down from 62.6, 51.7 and 53.5 days in the previous snapshot.
But officials said stocks remained stable, with the movements reflecting normal patterns.
Luxon echoed those assurances, describing the dip reported today as "very normal" and saying the country remained in phase one of its national fuel response plan.
"New Zealanders are reassured. They know that there is supply of fuel in the country, and that's because I think we've done some good work on it."
The PM appeared confident about fuel supplies in the coming months despite the ongoing ruction in the Strait of Hormuz and failed peace talks between the US and Iran.
"New Zealand is actually in quite a strong position even relative to say, Australia," he said.
"We've been talking from there with our fuel importers. They give us a lot of confidence that they've got all of their shipments coming through up until the end of May — even some into June.
"A lot of the refineries we've dealt with – in South Korea and in Singapore – they're finding alternative crude sources other than the Middle East, that of course, is giving everyone quite a bit of confidence in the system."
Talks underway for additional supply – Luxon
The Prime Minister's reassurances come as his Australian counterpart, Anthony Albanese, jetted off to Singapore last week for meetings to secure fuel supplies.
Labour has criticised Luxon for not doing more on fuel security.
The Prime Minister flagged that the Government was working to secure additional supply above current levels. "Within the next week, we should be in quite a good place with some of the negotiations that we've got going on."
Luxon said he had been in regular contact with the leaders of Singapore and South Korea, with the two countries being among New Zealand's key fuel supply sources.
On the broader geopolitical situation, the PM called for freedom of navigation to be restored through the Strait of Hormuz and said he was not aware of any request for New Zealand to participate in the blockade ordered by US president Donald Trump.
"We are concerned about any action that risks escalation, because that increases the risk of ongoing economic and energy instability. It is urgent to find a diplomatic solution."
Late last month, US investment bank JP Morgan projected that shipments to New Zealand and Australia could become less reliable in the back half of April.
The bank estimated that time period as the last point at which ships carrying crude processed before the Hormuz closure could reach the Pacific.
Luxon reaffirmed today that even if a resolution were reached overnight, the effects on the global oil markets would not immediately disappear.
"The disruption to supply chains and destruction of energy infrastructure in the Middle East means the impact on fuel supply and prices ... will linger for some time."
Refineries in Singapore and South Korea are crucial to New Zealand’s fuel provisions. (Source: 1News)
In-country stocks – fuel already held onshore at storage terminals – sat at 25.6 days of petrol, 21.7 days of diesel and 25.1 days of jet fuel. Those figures were also down from the previous update, which showed 28.3, 23.7 and 27.9 days respectively.
However, five tankers were now within New Zealand's exclusive economic zone, up from just two in the previous report, with petrol on water within the EEZ jumping from 1.4 to 13.6 days of cover. A further nine vessels were up to three weeks away.
Precautionary rationing plans take shape
The country remains in phase one of the national fuel response plan.
Nearly 2000 submissions were received during a two-week consultation on the plan's more restrictive phases three and four, which closed on Friday.
Luxon said the vast majority of feedback came from sector groups and businesses, focused on how priority bands would be classified, how they would operate regionally versus nationally, and distinctions between petrol and diesel allocation.
"We don't want to be operating in a parent-child manner. We want to be operating in an adult-to-adult manner, working with industry," he said of the Government's approach.
The Prime Minister said officials would take several weeks to work through the feedback before ministers made decisions on updates to the plan.
Pain at the pump and more rate hikes on the table?
A Westpac report released today found fuel spending had risen 15% compared with the same period last year, with motorists paying more but getting less.
Luxon acknowledged prices were hurting households and businesses, but pointed to a recent drop in global oil prices, saying the Government expected lower costs to flow through to the pump within a week or two.
"I underscore the volatility of the situation, because equally, those prices can go up or down very easily based off what's happening with the conflict," he said.
The average price of 91 unleaded had climbed $1.04 per litre nationwide – a 40% increase – while diesel prices had surged $1.90 per litre. The average volume of fuel purchased per transaction had dropped by around 6-8%.
Economists for the country's biggest bank, ANZ, now expect three back-to-back official cash rate increases this year – in July, September and October – lifting the rate to 3%.
Asked about the prospect of rate hikes, Luxon said there was significant uncertainty among economists about where inflation and growth would land.
"By the ANZ's only admission, it's pretty uncertain. There's a lot of economists with a lot of views about where inflation will go, and where economic growth will go."
The next MBIE fuel stocks update is due on Wednesday.
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