The Ministry of Business, Innovation and Employment will halt work on procuring reserve diesel stock and explore other ways to bolster New Zealand’s diesel resilience, Associate Energy Minister Shane Jones says.
MBIE will also begin work on changes to the minimum fuel stockholding regime.
Jones said a secure and resilient supply of engine fuels is critical to the economy and, as nearly all engine fuels are imported, New Zealand is particularly vulnerable to international and domestic supply disruptions.
“Ensuring New Zealand holds enough reserve stocks to ride out disruptions is a key pillar of fuel security and while the risks of supply disruptions are low, the consequences of a severe and sustained disruption would be significant,” he said
Legislation introduced in 2023 will require fuel importers to hold 28 days’ worth of petrol, 24 days of jet fuel and 21 days of diesel from 1 January 2025.
“A proposal for the Government to investigate funding 70 million litres in reserve diesel stock and its storage was also committed to at the time. Procuring additional reserve diesel carries significant capital cost. Cabinet will need a robust understanding of options and their impacts before making decisions,” Jones said.
MBIE will seek the public’s views on what the level of cover should be for New Zealand’s diesel stock and options for achieving that through a discussion paper later this year.
Jones said the announcement adds to the comprehensive work programme already underway to bolster New Zealand’s fuel security, which includes commissioning a study into New Zealand’s fuel security requirements and working with industry on their plans to increase jet fuel resilience at Auckland Airport.
Cabinet has agreed to the following measures to support improving New Zealand’s fuel security:
- Policy decisions needed to finalise information disclosure regulations to support the minimum fuel stockholding obligation. This includes:
- changes to the information disclosure regulations to minimise compliance costs to fuel importers by allowing stock in the Marsden Point to Auckland pipeline and at jet fuel refuelling facilities above 1 million litres to be counted towards minimum stockholding obligation requirements.
- Changes to how information is verified to reduce costs to fuel importers. An internal assurance statement from the company’s board will now be accepted rather than needing to supply an annual independent audit.
- Stop work on investigating government procurement of 70 million litres of reserve diesel stock (the equivalent of seven days of normal use) and its storage and management through a long-term lease agreement.
- Investigate other options to increase New Zealand’s diesel reserves from 21 to 28 days’ cover.
