Source: Radio New Zealand
The finance minister will reveal “targeted and temporary” support for hard-hit families on Tuesday, as fuel costs continue to rise.
Nicola Willis gave notice of the announcement at Monday’s post-Cabinet media briefing, alongside Prime Minister Christopher Luxon and Associate Energy Minister Shane Jones.
Jones also announced plans to align New Zealand’s fuel standards with that of Australia, allowing the import of fuel destined for Australia to New Zealand instead.
Willis said the decisions on support had been taken at Cabinet, and while some of the details were still being worked out, that would not affect how quickly families could get it.
“This conflict is impacting just about every New Zealander, it has pushed up the price of petrol, diesel and jet fuel and those increases are already hurting our people and our businesses. Unfortunately the government is not in a position to mitigate that impact on everyone,” she said.
“The approach we are taking is consistent with the findings of the Royal Commission of Inquiry into the response to the Covid pandemic, which highlighted the damage that can be done by untimely, untemporary and untargeted spending.”
It was unclear when the support would be rolled out, with Willis saying that would be made clear when it was announced.
Motorists should fuel up as and when they needed to, she said, with the government’s solution set to target income rather than fuel prices.
‘No concerns’ about fuel supply
For now, there were no concerns about fuel supplies in New Zealand, she said.
“To date, all shipments have arrived as scheduled and fuel importers have not raised any concerns about shipments that are due here in future.
“It remains the case that we have to be prepared for the possibility of disruptions in the medium to longer term, particularly because the refineries in Southeast Asia from which we import more than 90 percent of our fuel may have challenges getting the feedstock crude oil that they need.”
Luxon said the country had at least enough fuel for the next seven weeks, although the government was preparing in case of long-term further disruption.
“If you are someone who has just faced a 30 percent increase in your fuel bill or a 60 percent increase in your diesel bill since the actual crisis, since this conflict has commenced, it’s real.
“We cannot do the Covid learnings and mistakes, which was just spray a heap of money around that has short term gain but long term pain – massive long-term pain – and equally we’ve got to find a way to get people support in a temporary, targeted kind of way.
“The reality is that we are not going to be able to alleviate the pressure of rising prices for everyone, but what we’ve been clear about are the parameters for any support that we provide, which is that it must be targeted, it must be timely, and it must be temporary and not drive inflation or debt higher.”
The latest data from Ministry of Business, Innovation and Employment showed stocks for about 47 days of fuel, including about 50 days worth of petrol, 46 days of diesel, and 45 of jet fuel.
The data, accurate to last Wednesday, marks about two days fewer than was reported last week.
One new fuel shipment arrived on Sunday, and two more – carrying between them another 20 days of each kind of fuel – are expected to arrive in the next fortnight.
The next update is due on Wednesday, but the ministry says New Zealand is not yet experiencing the kind of sustained disruption that would justify emergency measures under the national fuel plan.
Luxon said nothing had changed about New Zealand’s position on the Iran conflict, but that Iranians “holding hostage a whole bunch of ships to bring fuel and critical supplies … that’s not acceptable”.
“What we want to see is a quick resolution to this conflict and that means that actually respecting civilians and civilian infrastructure is really important … we think the best thing is de-escalation.”
Willis confirmed some consideration had been given to which industries could be prioritised if fuel rationing was needed, but this would not be revealed until a later date.
“We will not be having to hit the button tomorrow, but we will outline what our proposed phasing of response is … we recognise that it’s useful for people to understand what could be coming under a range of scenarios,” she said.
She noted the high prices would also naturally limit fuel use.
“It is pinching people’s pockets already and that is changing people’s choices. So Auckland transport have reported they had their biggest day of public transport use in seven years, I think that’s people deciding to use their cars a little bit less because it’s pretty expensive right now.”
‘Anzac pact’ in fuel and other standards
Jones outlined the government’s plan to temporarily allow fuel that meets Australian specifications to be supplied to the New Zealand market for up to a year.
Fuel companies had said this could allow them to secure shipments more quickly, and from a wider pool of suppliers.
Jones said long-range vessels typically carried about 120 million litres, and New Zealand consumed about 24 million litres of fuel a day – with about 47 percent of that being diesel, about 35 percent being petrol, and the remainder being aviation fuel.
“Should such a vessel be on its way to Australia then we would have the ability to also benefit from such a vessel.”
He said fuel refined to Australian standards was compatible with New Zealand vehicles, and met safety and quality expectations, pushing back on the suggestion it would allow dirtier fuels than under current standards.
“It’s unkind of us to refer to our Aussie compatriots as dirty,” he said. “There’s two things – whether or not fuel used in a high-temperature northern Australian environment, we are advised that a lot of that fuel is suitable for the North Island … with the South Island the fuel importers assure us that they will have the optionality to service both of those markets.”
He said officials had spoken to Australian counterparts.
“We pushed the idea that at some point in time we should explore and ANZAC pact and I would say to you this is the first step that we’re taking to join forces.
“It’d be fair to say that I’ve got a fair degree of support in our Cabinet to actually move towards permanent harmonisation of not only these standards but a variety of other standards in the economy.”
Willis and the associate ministers of finance would make further improvements, he said.
The government would not follow Australia’s lead in relaxing standards to allow higher-sulphur fuel, he said, at least not yet.
“At this stage it’s not our intention to do so, however, we will take advice should the situation change – and that could be an option that expands our supply.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
