The Government is planning for future scenarios where there could be a shortage of crude oil, Prime Minister Christopher Luxon says.
The Prime Minister told Newstalk ZB’s Mike Hosking he remained focused on security of fuel supply as fuel prices soar ever higher amid turmoil from the war in Iran.
Supply issues would have “the biggest single impact on jobs and incomes”, he said.
Over the weekend, petrol hit $4 a litre in some Auckland suburbs, with an average $3.30 a litre for unleaded 91 and $3.61 a litre for unleaded 98 across the country.
Some petrol pumps have run dry, despite reassurances from Finance Minister Nicola Willis that the country had enough fuel reserves for nearly two months after Iran closed the Strait of Hormuz, a shipping route for around a third of global oil exports.
Luxon said the Government would have something to say “shortly” on relief for those affected by soaring fuel prices, particularly diesel, which was affecting rural communities.
Asked if he needed another week to make those decisions, he said no.
“We’re going to need to get people support quickly.”
Luxon said New Zealand’s fuel supply was “in quite good shape”.
He would be talking to the Singaporean Prime Minister shortly, and fuel importers had reassured the Government they had good supply – confirming that went beyond the 49 days of fuel currently in stock.
“Having said all of that, I’m wanting our system to think about ... is there going to be a shortage of crude at some point coming through that strait? Because even if it comes through and it flows through and it’s released tomorrow, there must be some lag effect in the system.”
Refineries in South Korea and Singapore were trying to secure supply from the US and other sources.
Asked about Russian fuel, he said “we don’t need to go there at this point in time”.
New Zealand had not been asked or engaged around any multilateral efforts to open the Strait of Hormuz, Luxon said – responding to a report that Nato secretary Mark Rutte overnight had said a group of Nato countries and allies including New Zealand were coming together to secure the strait.
Rutte’s statement was referring to two separate things, Luxon said. The first was like-minded countries including New Zealand signing up for a joint statement on Friday night condemning the closure.
“The second part of what they’re alluding to is then there is a discussion around multilateral efforts to how you might go about doing that. We have not been asked, we have not been engaged on any of that and obviously any future decisions around that we’d have to have a pretty big discussion at Cabinet.”
It comes as a new RNZ-Reid Research poll out this morning shows National slipping further behind Labour, dropping to 30.8% support.
The online poll surveyed 1000 eligible voters between March 12-20, well after the war in Iran began.
Just yesterday, Willis was dismissing accusations that the Government had been too relaxed in its response to the crisis, saying it was “vigilant and alert”.
Speaking in front of a fuel tanker at Whangārei’s Marsden Point Oil Refinery on Sunday, Willis said New Zealand could expect importers to keep securing fuel orders for the coming months.
“Were they to face delays in those arrivals or disruptions, they would try and source fuel from elsewhere,” she said.
Willis acknowledged fuel prices were putting pressure on people’s budgets, saying a relief package was being discussed by Cabinet - but it would be targeted relief for low- to middle-income workers and families with children, not a blanket fuel tax cut.
“I think New Zealanders will understand this, that income straight to people that they then can make choices about is better than just discounting one form of transport,” she said.
In his State of the Nation speech on Sunday, New Zealand First leader Winston Peters also announced his party would campaign on splitting up the energy gentailers (generators and retailers) so “they can no longer control both the power and the price”.
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