Finance Minister Nicola Willis has confirmed the Government is getting advice on passing legislation to address the energy crisis, brought about by the war in the Middle East.
Willis confirmed the Government had received advice on updating the 1981 Petroleum Demand Restraint Act in response to the crisis.
It would make announcements on the matter later this week, after officials advised the legislation that would implement any fuel response “may need an update”.
Willis said the Government was “considering our options”, but said the Government would not need to pass a law this week as there was not currently an immediate fuel crisis.
“We face no urgent imminent supply issue that would require that be passed under urgency this week,” she said.
Prime Minister Christopher Luxon said the Government was “not going to get hung up on process, if we need to move we are going to move”.
However, there is a risk that if the Government moved without legislation, its fuel plans could be open to legal challenge.
The legislation would need to be passed under some form of urgency, given how quickly the situation is evolving.
Willis said the Government would not be seeking to pass the legislation in a single day, as the House can sometimes do.
The issue relates to a mismatch between the four step alert level scheme in the Government’s 2024 National Fuel Plan and the 45 year-old legislation that would need to be used to bring the plan into effect.
The plan envisages tools, such as coupons to limit fuel purchases, could be used to conserve fuel stocks.
To do this, however, the Government would need to use the Petroleum Demand Restraint Act from 1981.
That law, which was passed after the 1970s oil shocks, gives the Government the ability to intervene in the way people use fuel in order to conserve supply; it gives the power for the Government to create a coupon scheme for fuel, ration petrol, and restrict driving - the sorts of tools that might be used to control supply.
However, in order to trigger these measures, the Government must demonstrate that “reasonably available supplies” of petrol products are likely to be insufficient to maintain stocks at “normal prudent levels”.
The ambiguity around “normal prudent levels” has left some people curious.
Professor Dean Knight, of Victoria University, said there was an “important question” whether the current or forecast fuel situation would meet this threshold, “when our assessment of prudence in normality is that we can get by with relatively low levels?”.
“Whatever way you look at it, the section sets a factual threshold for the making of regulations, albeit there’s an evaluative judgment about prudence etc at its heart.
“On the one hand, the Government will have to have their ducks in a row before they make any regulations - and take care to square their evaluation now with any evaluation before.
“On the other hand, the fact the threshold involves a lot of judgment and is a bit fuzzy, could mean the courts give ministers some latitude about whether the threshold is met,” he said.
During the Covid-19 pandemic, the Government used existing legislation, some dating back to the 1950s, to implement the first lockdown and was taken to court.
The High Court ultimately found that part of the lockdown was briefly unlawful.
The Government passed bespoke Covid-19 legislation to better handle its response.
Knight said New Zealand “learnt in Covid times that emergency statutes designed for earlier crises, arising in different contexts, are often not fit-for-purpose for the crises of today”.
“The Government might want to reflect on whether a bespoke legal regime for this particular potential crisis might be better.”