NZ Strengthens Fuel Resilience to Safeguard Economy and Essential Services Against Disruptions

Associate Energy Minister Shane Jones Announces Plans to Boost Diesel and Jet Fuel Reserves, Aiming for Enhanced Security Amid Rising Global Supply Chain Vulnerabilities.

New Zealand is taking steps to bolster its fuel resilience to ensure that critical goods and services keep moving in the event of disruptions, Associate Energy Minister Shane Jones announced. Acknowledging the country's reliance on imported fuels, Jones outlined key measures to strengthen fuel security and reduce vulnerability to international and domestic supply chain interruptions.

"Fuel security is a top priority for the Coalition Government," Jones stated. "We recognize how vital engine fuels are to our economy and the significant impact any fuel disruption would have on New Zealanders. Our near-total reliance on imported fuel makes us particularly susceptible to global supply disruptions."

Minimum Stockholding ObligationTo mitigate this risk, New Zealand will be implementing a minimum stockholding obligation from January 1, 2025. This requires fuel importers to hold:

28 days’ worth of petrol,

24 days of jet fuel, and

21 days of diesel reserves.

This policy is a direct response to concerns about fuel shortages that could arise from geopolitical tensions, natural disasters, or shipping delays. Jones highlighted that the regulations also include a new information disclosure requirement, which will provide the government with clearer oversight of fuel stock levels across the country.

However, the minister expressed concern that the current stockholding requirements may not be sufficient, especially for diesel and jet fuel.

Boosting Diesel Reserves

"Diesel is our most crucial fuel – it powers the trucks that deliver food and essential supplies across New Zealand. If supply chains are disrupted, the impact on people and businesses would be severe. That's why I’m proposing an increase in diesel reserves from 21 to 28 days," Jones said.

This increase would provide a larger buffer to ensure critical services such as healthcare, transport, and food distribution could continue even during prolonged fuel disruptions.

Securing Jet Fuel at Auckland Airport

Jones also addressed the importance of jet fuel security at Auckland Airport, the country’s main international hub. In 2017, a jet fuel supply disruption at the airport caused major problems, with flights being diverted or delayed. More recently, issues with jet fuel quality in 2022 further underscored the need for greater safeguards.

"Auckland Airport is the gateway to the world for New Zealand. It handles 75% of international seat capacity and 90% of long-haul flights. Disruptions here can severely impact our connectivity with the world," he explained.

Despite a 2019 Government Inquiry calling for an increase in jet fuel reserves near Auckland Airport, little progress has been made by fuel companies. The Minister announced plans to introduce location-specific stockholding requirements to ensure that sufficient jet fuel is stored near Auckland Airport, preventing future supply chain disruptions.

Long-Term Energy Resilience

In addition to these immediate measures, Jones noted the government's broader commitment to strengthening New Zealand's energy resilience. This includes revisiting the ban on oil and gas exploration. By tapping into domestic energy resources, New Zealand aims to reduce its dependence on imported fuels and enhance its ability to manage disruptions.

"Reversing the ban on oil and gas exploration is a necessary step towards ensuring that New Zealand can rely on its own resources during crises. Our energy resilience and self-determination are vital to safeguarding the economy and keeping essential services running," he said.

Have Your Say

The public is invited to provide feedback on the proposed increase in diesel reserves, with consultation open until December 6, 2024. The discussion document can be accessed here: Options for Improving Diesel Resilience.

Jones concluded by emphasizing the importance of collective action in ensuring New Zealand's fuel security. "By working together, we can build a more resilient energy system that keeps New Zealanders moving, no matter the challenges we face."