- Hon Shane Jones
New Zealand's fuel resilience is being strengthened to ensure people and goods keep moving and connected to the world in case of disruptions, Associate Energy Minister Shane Jones says.
"Fuel security is a priority for the Coalition Government. We are acutely aware of how important engine fuels are to our economy and the impacts a fuel disruption would have on New Zealanders. New Zealand imports nearly all of its engine fuels, making us particularly vulnerable to international and domestic supply disruptions," Mr Jones says.
"Ensuring we hold enough reserve stocks in the right place to ride out possible disruptions is a key pillar of fuel security. It is a critical insurance policy needed to safeguard against the potentially devastating impacts that a severe and sustained fuel disruption might have.
"The previous government introduced a minimum stockholding obligation, which means from 1 January 2025 fuel importers will be required to hold 28 days' cover for petrol, 24 days for jet fuel and 21 days for diesel.
"Importantly, the minimum stockholding obligation regulations introduce a new information disclosure rule which enables government to have much clearer oversight over how much fuel is held in New Zealand.
"However, I am not satisfied that 21 days' cover for diesel is enough, nor is the jet fuel stockholding rule sufficient to avoid disruptions to international aviation such as that we experienced in 2017.
"Diesel is our most important fuel - it keeps food and people moving through our country. Without it, New Zealanders would struggle to access everything they need. We need to hold enough diesel onshore to keep essential goods moving through the country and vital services running, even if fuel supply chains have been disrupted.
"For this reason, I am seeking feedback on increasing diesel reserves to 28 days' stock to help reduce any potential impact of a disruption to supply.
"I am also concerned about security of supply of jet fuel at Auckland Airport. In September I informed the fuel companies which own the jet fuel infrastructure at the airport of my plan to seek Cabinet agreement on regulations that would mandate sufficient jet fuel to be held near Auckland Airport.
"Auckland Airport is New Zealand's gateway to the world - 75 per cent of all international seat capacity into New Zealand and 90 per cent of all long haul flights come into Auckland.
"New Zealand found out the hard way in 2017 when jet fuel supply was disrupted, forcing planes to be diverted and reducing our connection with the world. Further issues with jet fuel quality in 2022 reinforce the need for action.
"Despite the 2019 Government Inquiry into the 2017 Auckland Fuel Supply Disruption recommending jet fuel companies urgently increase their jet fuel holdings near Auckland airport, little progress has been made. Establishing a location-specific jet fuel stockholding requirement would ensure the jet fuel companies act to secure enough fuel is on hand to ride out any disruption to supply.
"Along with reversing the ban on oil and gas exploration, these actions will further strengthen New Zealand's resilience and self-determination to ensure disruptions to our energy supply do not halt the economy," Mr Jones says.
Read the discussion document on increasing diesel reserves from 21 to 28 days and have your say here: https://www.mbie.govt.nz/have-your-say/options-for-improving-our-diesel-resilience. Consultation closes on December 6.
