Source: Radio New Zealand
there were 49 days’ worth of petrol, 54 of diesel and 50 of jet fuel in New Zealand at the start of this month. File photo. RNZ / Kim Baker Wilson
New Zealand could make its fuel supplies last about three to four weeks if supply was completely cut off.
Ministry of Business, Innovation and Employment (MBIE) data shows that, on 1 March, there were 49 days’ worth of petrol, 54 of diesel and 50 of jet fuel in New Zealand.
But that total includes “stock on water” that has shipped but not yet arrived here. That is more than half the diesel stock, and 22 of 49 days’ supply of petrol.
War between the US, Israel and Iran has created significant disruptions to the price and supply of fuel and oil around the world, particularly due to the closure of the crucial supply route through the Strait of Hormuz.
Murat Ungor, economist at the University of Otago, said if fuel were completely cut off tomorrow, New Zealand could sustain itself for roughly a month, or just under, with the stocks on shore, assuming there was rationing and prioritisation for essential services.
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He said stock on water could still take some time to access and transport.
“New Zealand’s fuel supply position is structurally exposed in ways that deserve serious attention. Since the closure of the Marsden Point oil refinery on 31 March 2022, New Zealand has been entirely dependent on imported refined fuels,” he said.
“International transport was significantly disrupted in 2020 due to border closures implemented in response to the coronavirus pandemic. Fuel use for both international aviation and international shipping has been recovering in the years since. Any sustained conflict involving Iran introduces an immediate risk to global oil flows through the Strait of Hormuz, through which approximately 20 percent of the world’s petroleum liquids transit daily.”
Kelly Eckhold, chief economist at Westpac, said there were two boats due to arrive at Marsden Point, near Whangarei, in 10 days. “What I’m not totally sure is if there are others that are also en route but it certainly looks like that’s the situation… there’s about 45 to 48 days’ of products available assuming the stock that’s on the water makes it here.”
He said at the time the new stock arrived, the country could be at around 17 or 18 days’ worth.
He said if supply was completely cut off, there would probably be a prioritisation process. “With ordinary car use there can be changes in the way that people use fuel. You can work from home… the thing with diesel is that it is used in the supply chain.
“The agricultural sector is a heavy user, the transport sector is a heavy user. They’re required to be able to do that otherwise you can’t even get goods to the supermarket. I would expect that if it really got that bad they would have some sort of prioritisation scheme in place to be able to keep things going.”
He said whether that was likely would depend on how the situation unfolded. “If things don’t resolve in a month or six weeks, it would strike me as a decent probability.”
ANZ chief economist Sharon Zollner told RNZ the disruption of oil around the world was becoming “pretty real”.
She said the United Arab Emirates and Kuwait had joined Iran in reducing output because they were not able to ship through the usual routes.
MBIE said the country’s fuel stocks were still “healthy” and fuel companies were not reporting issues with supply chains.
“New Zealand has a well defined, multi agency system for managing fuel supply disruptions,” a spokesperson said.
“In the event of disruption, the Fuel Sector Coordinating Entity-led by MBIE-works with NEMA, fuel companies and regional civil defence groups under the National Fuel Plan to maintain supply, prioritise essential services, and manage distribution.
“Should the situation escalate, the International Energy Agency (IEA) may intervene through collective actions like coordinating release of strategic oil reserves by their member states. This happened when Russia invaded Ukraine. The New Zealand Government has agreements with governments from the USA, United Kingdom and Japan to enable ticket contracts or stocks to be held in those countries count toward our emergency oil reserves.
“These measures, accompanied by the government’s long term Fuel Security Plan, provide a clear framework to respond effectively to both domestic and global fuel supply shocks.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
