Piha residents found an unpleasant surprise this morning after 28 barrels - some filled with used oil - had been dumped at two car parks on Piha Rd.
Some of the barrels had tipped over and spilt the oil on the ground.
A police spokeswoman said that police had contained the spill but it could have been dangerous to locals.
"The spill has now been contained but could have run into the upper Nihotupu Reservoir which had the potential to contaminate the water supply," she said.
Piha resident Sarah Munro told the Herald that locals believe they were dumped sometime last night.
"We think it was last night because nobody had seen it before that.
"I went past at about 8.30 this morning and saw the sites where they dumped them."
She added that others thought somebody had removed distinctive features from the drums that may have helped locate where they originated.
Piha, Karekare and Anawhata locals regularly call the council to have rubbish removed, but she said that this was an all time low.
"It's a major problem dumping rubbish at Piha - there is often household rubbish, furniture and even cars."
Police have labelled the behaviour as extremely concerning and they are keen to hear from anyone who may have witnessed any suspicious activity.
"Anyone with information can contact Constable Kelly Johnson on 021 192 3033 or you can call Crimestoppers anonymously on 0800 555 111."
Auckland Council confirmed 10 drums were found in a carpark area near Anawhata Rd with the other site found near the entrance to the Upper Nihotupu Dam Walk on Piha Rd.
Auckland Council's regulatory compliance team manager Adrian Wilson said the areas have been taped off by police and they were working to contain the spill.
"We are working to contain any spillage that may get into nearby waterways.
"We will also undertake an investigation to try to determine the identities of the people who dumped the drums."