Thirteen ships loaded with fuel are on the way to New Zealand and three further ships are slated to leave, Finance Minister Nicola Willis says.
Willis made the remarks at a 1pm update on the Government’s response to the war in the Middle East. She also revealed Treasury’s “worst-case” scenario, which assumed a long conflict, was for inflation to rise from 3.1% now to 3.7%.
Willis noted that this worst-case scenario had inflation peaking lower than the current inflation rate in Australia, which is 3.8%.
New Zealand imports most of its refined fuel from Asia, with Asian nations getting most of the crude oil that they refine from the Middle East, making New Zealand vulnerable. Willis warned this supply chain could be disrupted in future.
“There could be a point in the future in which importers face challenges securing orders. That is because Asian fuel refineries who New Zealand imports most of our fuel from do rely on the Middle East for their stocks of fuel,” Willis said.
Asked whether the Government would cut fuel taxes to help households deal with the rising cost of fuel, Willis said the Government was watching the fuel price and monitoring whether an intervention was required.
This intervention was not required now, with fuel prices still lower than their 2022 peak in the wake of the war in Ukraine.
Willis said any intervention would be “timely and targeted”, a recommendation of the Covid Royal Commission. She said some households would not need a fuel tax cut, but other households had little choice but to drive to work because there were no other options.
Willis hinted that any intervention would be more targeted than a blanket fuel tax cut.
Labour’s Barbara Edmonds was critical of the Government not having anything to provide for struggling families today.
“The Government needs to speed up their work given that this has been two weeks and she hasn’t taken a paper to Cabinet yet.”
Edmonds agreed any intervention needed to be timely and targeted. She initially said Labour believed “all options should be on the table” before pointing to a potential expansion of emergency food grants.
The ongoing war centred around Iran has led to the effective closure of the Strait of Hormuz, through which about 20% of the globe’s oil supply is carried. This has raised concern about medium and long-term supply of oil to refiners.
The Ministry of Business, Innovation and Employment (MBIE) website is tracking fuel stocks, but it hasn’t been updated since last week.
“The Government receives updated figures from fuel companies on Tuesdays and publishes them on Wednesdays. The next update will be on Wednesday, 18 March,” the ministry said on Monday morning.
As of March 8, there were roughly 52 days’ worth of stock either on shore or on ships heading to New Zealand.
Willis said she was working to get more timely updates of fuel stocks.
This morning, Prime Minister Christopher Luxon and Associate Energy Minister Shane Jones reassured New Zealanders that there was sufficient supply. That came amid reports of high demand at some petrol stations over the weekend.
As the Herald last week reported, New Zealand has an alert level-style framework in place in case of fuel disruption or an emergency. The country is currently at Level 1 of the plan, which means there is a “minor” impact on the sector but this “may escalate”.
At this stage, a co-ordinating group led by MBIE is monitoring the situation, communicating with fuel importers, and planning for potential escalation. However, no mandatory demand measures are yet necessary.
“If the situation were to worsen, the Government has a range of tools it can use to manage supply pressures and keep essential services running,” MBIE told the Herald on Friday.
“These steps would only be taken if genuinely needed, and they would be scaled to match the severity and duration of the disruption.
“To be clear, we are not experiencing the types of sustained supply disruption that the National Fuel Plan enables as emergency measures.”
While stock is currently adequate, the Government is considering potential issues in the medium term. For example, what if a country that provides New Zealand with fuel was to introduce export controls out of its own national interest, or a ship was diverted away?
Willis has said that if a situation like this were to occur, New Zealand would have time to react. In the first instance, the Government would expect fuel importers here to look for alternative sources.
There is the potential for economic impacts outside of just the supply and price of fuel. When fuel prices go up, this can have a flow-on effect to the price of other goods.
The Finance Minister has said there will potentially be inflationary effects, but New Zealand was starting from a stronger position than others, like Australia. Willis said the effect on inflation, depending on the length and impact of the war, could be between 0.4-1%.
In terms of gross domestic product (GDP) impact, Willis said New Zealand’s economy was still forecast to grow this year, but by a smaller amount than previously expected. It could be between 0.1 and 0.5 lower than previously thought.
US President Donald Trump has called on countries to send ships to help secure the Strait of Hormuz. The Prime Minister on Monday morning said New Zealand hadn’t been formally asked to send a ship, but if it was, there would be a discussion first at Cabinet.
Jamie Ensor is the NZ Herald’s chief political reporter, based in the press gallery at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist in 2025 for Political Journalist of the Year at the Voyager Media Awards.