The government says fuel is flowing. The stock numbers say weeks of cover. But behind the reassuring headlines, six fundamental questions about New Zealand’s fuel security remain unanswered.
Last week, this publication examined the upstream risks to New Zealand’s fuel supply, tracing the chain from the pumps at your local service station back through the Asian refineries that produce our fuel to the crude oil fields that feed them. The picture was concerning. The Strait of Hormuz remains effectively closed. The refineries in South Korea and Singapore that supply most of our fuel are scrambling for alternative crude. In-country fuel stocks sit just days above the legal minimum.
Since that article was published, the situation has not improved. The US-Iran ceasefire talks have collapsed. A US naval blockade has added a new dimension of escalation. And the questions that the government has not yet answered have only become more pressing.
Here are six of them.
1. Will the refineries start hoarding?
South Korea has already restricted naphtha exports for five months. That is a petrochemical feedstock, not finished fuel, but the signal is clear. When crude supply gets tight, exporting countries protect their domestic market first.
South Korea provides approximately 48 percent of the value of fuel imported into New Zealand. Before the Hormuz crisis, roughly 68 percent of South Korea’s crude oil transited the strait. Korean refiners have improvised brilliantly, sourcing 110 million barrels from 17 alternative countries for April and May. But this alternative crude is more expensive, comes from further afield, and often requires refineries to adjust their processing configurations for unfamiliar grades.
If crude becomes scarcer still, or if prices rise to a point where domestic supply becomes a political issue in Seoul, South Korea could restrict refined fuel exports. It has already capped exports at 2025 levels to prevent foreign buyers from stockpiling. The next step would be a full export ban of the kind China imposed in March. New Zealand would have no recourse. We are a small buyer at the end of a very long queue, and we have no long-term government-to-government supply agreements that would guarantee access during a genuine shortage.
2. What happens when the current shipments run out?
The Prime Minister has said fuel importers have confirmed their orders and shipments through to the end of May. That is approximately six weeks from now. MBIE says it has received no reports of material issues with future deliveries.
But confirmed orders depend on refineries having crude to process. If Korean or Singaporean refineries are running at reduced capacity by June because their alternative crude sources cannot fully replace the lost Gulf supply, confirmed orders do not mean much. A refinery that has accepted an order but cannot source enough feedstock will either delay the shipment, reduce the volume, or invoke force majeure. None of these scenarios appear in the current government messaging.
The question is what happens in June. The government has not said what contingency plans exist if the major refineries supplying New Zealand begin to cut export volumes. It has not said what alternative suppliers have been approached. And it has not said what price the country is willing to pay to secure fuel from further afield, from India, from the US Gulf Coast, or from wherever product might be available, if our usual suppliers can no longer deliver at the volumes we need.
3. How real are the IEA oil tickets?
New Zealand is a member of the International Energy Agency, which requires member countries to hold the equivalent of 90 days of net oil imports in reserve. New Zealand meets this obligation partly through physical onshore and on-water stocks and partly through what are known as “oil tickets”, contractual agreements with other IEA members (reported to include the United States, United Kingdom, and Japan) that count oil held in those countries toward New Zealand’s 90-day obligation.
On paper, these tickets provide a comfortable buffer. In practice, their value during a global supply crisis is uncertain. The United States is managing its own domestic fuel market pressures and has drawn on its Strategic Petroleum Reserve repeatedly in recent years. The United Kingdom has limited refining capacity and its own supply chain concerns. Japan sources 93 percent of its crude through the Strait of Hormuz and has already begun releasing strategic stockpiles for its own use.
The fundamental question is whether, in a scenario where the Hormuz closure persists for months and global oil markets become a scramble for available supply, these countries would actually release physical oil to honour ticket obligations to a country of five million people on the other side of the world. The government has not publicly tested this question. The answer may be yes. But it has not been demonstrated, and the reassurance that New Zealand meets its 90-day IEA obligation is only as solid as the willingness of ticket counterparties to deliver when it matters.
4. Diesel is the one that really matters
Public attention has focused on petrol prices because that is what most people see at the pump. But diesel is the fuel that keeps the country functioning. It powers the trucks that move every item of freight from port to warehouse to supermarket. It runs the tractors, harvesters, and irrigation pumps that sustain the agricultural sector. It fuels the excavators, cranes, and concrete trucks that build housing and infrastructure. It operates the fishing fleet. And it provides backup electricity generation when the hydro lakes run low.
Up to 95 percent of farming machinery in New Zealand runs on diesel. The construction industry is almost entirely diesel dependent. The freight fleet that connects every town in the country to its supply chain runs on diesel. Unlike petrol, where people can drive less, take the bus, or work from home, diesel demand is structural. You cannot tell a trucking company to stop delivering groceries. You cannot tell a farmer to stop milking.
And yet diesel has the thinnest in-country buffer of the three main fuel types. At 21.7 days of in-country stock as at 8 April, diesel sits barely above its 21-day Minimum Stockholding Obligation. The government’s own fuel security study identified diesel as the fuel most likely to run short during a sustained 90-day disruption. The planned increase to a 28-day obligation does not take effect until July 2028. That is more than two years away.
The additional diesel storage at Marsden Point, funded under the April 2026 emergency allocation, will add 90 million litres of capacity. That is approximately 8.4 days of additional diesel supply at current consumption rates. It will help, but it will take months to bring online, and it does not change the fundamental picture. New Zealand’s most important fuel has the least margin for error.
5. The Marsden Point decision
When the Marsden Point refinery closed in 2022, the prevailing view was that importing refined fuel from multiple Asian refineries was more resilient than depending on a single domestic refinery. The logic was sound in a world of open sea lanes and stable global supply. A domestic refinery can be knocked out by a single event, an equipment failure, a natural disaster, a power cut. Multiple foreign suppliers provide diversification.
That logic assumed the suppliers would always be able to supply. The Hormuz crisis has invalidated that assumption. When the crude oil that feeds those multiple foreign refineries all comes from the same place, the diversification is an illusion. New Zealand did not diversify its supply chain when it closed the refinery. It outsourced a single point of failure to someone else’s country.
The government is now recommissioning storage tanks at Marsden Point. Storage is valuable. But storage is not refining capacity. A tank full of diesel provides weeks of buffer. A refinery provides the ability to produce fuel indefinitely, provided feedstock is available. The Worley study commissioned by Channel Infrastructure estimated that rebuilding refining capacity at Marsden Point would cost between $4.9 billion and $7.3 billion and take at least six years. Even if the decision were made tomorrow, the earliest a rebuilt refinery could operate would be the early 2030s.
The practical question is not whether to rebuild the refinery. The cost and timeline make that unrealistic as a response to the current crisis. The question is what New Zealand does in the interim, in the years between now and the point where electrification of the vehicle fleet reduces fuel import dependence to manageable levels. The answer, for now, is more storage, more diverse supplier relationships, and hope that the global supply chain holds together. That is not a strategy. It is a bet.
6. What does rationing actually look like?
The government has published a four-phase Fuel Response Plan. Phase 1, the current phase, involves monitoring and information campaigns. Phase 2 involves closer coordination with industry and voluntary demand management. Phases 3 and 4 involve progressively severe demand restraint measures, potentially including fuel rationing under the Petroleum Demand Restraint Act 1981.
The plan outlines the framework. What it does not do is explain what rationing would actually look like in practice. The National Fuel Plan identifies 14 categories of critical customer, including emergency services, health, food supply, and essential government functions. But it explicitly states that these categories are not listed in priority order. There are no volumetric quotas specifying how much fuel each category would receive. There are no allocation formulas. There is no published triage system for deciding, when fuel is genuinely scarce, who gets it and who does not.
Researchers at Laloli Research and the Adapt Research collective have pointed out this gap. Without a pre-agreed, quantified rationing framework, allocation during a crisis defaults to ad hoc decision making under political pressure. That is not a criticism of the current government specifically. No previous government developed such a framework either. But the absence of one means that if Phase 3 or Phase 4 is triggered, officials will be making life-and-death allocation decisions on the fly, without the benefit of a plan that has been tested, debated, and agreed in advance.
The 1979 carless days scheme, the last time New Zealand imposed fuel restrictions, was a blunt instrument that required motorists to nominate one day per week when they could not drive. It was crude but simple. Modern rationing, if it comes, would need to be far more sophisticated, distinguishing between essential and non-essential use, protecting freight and agriculture, maintaining emergency services, and managing public expectations. The government has not explained how it would do this. The time to develop such a plan is before it is needed, not after.
The Uncomfortable Reality
None of these questions have easy answers. Some of them may not have answers at all until events force them. But the fact that they remain unanswered, six weeks into the most serious disruption to global oil supply in modern history, is itself a measure of how underprepared New Zealand was for this scenario.
The government’s messaging has been consistently calm. That is appropriate. Panic does not create fuel. But calm is not the same as candour. New Zealanders deserve to know what the contingency plans are if South Korea restricts exports, if the June shipments fall short, if the IEA tickets prove to be paper promises, if the diesel buffer drops below the legal minimum. The answers may be reassuring. They may not be. Either way, the questions need to be asked and answered publicly, not left to be discovered in a crisis.
The ships keep coming. But the questions that should be keeping policymakers awake at night are about what happens when the upstream supply chain can no longer deliver what it has promised. Six weeks of confirmed orders is not six months of security. And three weeks of fuel on our own soil is not a plan. It is a countdown.
Sources
- MBIE, Fuel Stocks Update, April 2026
- MBIE, Fuel Security Plan, November 2025
- New Zealand’s Fuel Security Explained (Newswire)
- New Zealand’s Fuel Stocks Look Safe. The Refineries Tell a Different Story (Newswire)
- IEA, Oil Market Report, March 2026
- S&P Global Platts, Asian refinery margins and output data
- Laloli Research and Adapt Research, analysis of the National Fuel Plan
- NZ Fuel Watch
- RNZ, 1News, NZ Herald, Newsroom
What questions do you want answered about New Zealand’s fuel supply? Share your thoughts in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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