Fuel supply emergency level system: How New Zealand’s response would change at each stage; when car bans might happen

New Zealanders are well accustomed to an alert-level system after years of moving up and down the ladder of Covid-19 restrictions; the fewest rules and conditions at Level 1, while the most severe are found at Level 4.

But such a system isn’t just reserved for a pandemic. New Zealand’s National Fuel Plan similarly contains four levels of escalation to respond to a disruption to fuel supply, depending on the severity of the situation.

The issue of fuel supply has arisen following the United States and Israel’s attack on Iran, the Iranian regime’s retaliatory strikes on neighbouring countries, and the effective closure of the Strait of Hormuz, through which much of the globe’s oil supply is carried.

While government officials are in close contact with fuel companies, keeping an eye on supplies, and considering options should circumstances worsen, New Zealand isn’t at the stage where mandatory measures to limit demand and use are being required.

The country is currently at Level 1 of the fuel plan, the Ministry of Business, Innovation and Employment (MBIE) confirmed to the Herald on Friday.

“If the situation were to worsen, the Government has a range of tools it can use to manage supply pressures and keep essential services running,” a spokesperson said.

“These steps would only be taken if genuinely needed, and they would be scaled to match the severity and duration of the disruption.

“To be clear, we are not experiencing the types of sustained supply disruption that the National Fuel Plan enables as emergency measures.”

MBIE has convened the Fuel Sector Co-ordinating Entity (Fuel SCE), which “increases lines of communications with the fuel industry and oversight of fuel imports”. It last met yesterday.

Ministers have also stressed there is no need to panic. Although there are reports of high demand, the latest update from MBIE shows more than 50 days of fuel stock either onshore or on its way to New Zealand.

There is a question, however, over the medium-term. Finance Minister Nicola Willis said this morning that disruptions to shipments could lead to “problems weeks or months down the track”.

While we may have fuel on a ship coming to New Zealand, what happens if, in the coming weeks, another nation puts in place export controls?

If there were signs our access to fuel could be at risk, New Zealand would have time to react. Our fuel supply wouldn’t immediately drop to zero. In the first instance, the Government would expect importers here to look for alternative sources.

In terms of government action, Resources Minister Shane Jones has said ministers are getting advice on all potential options should stock fall low.

The fuel emergency level system

At the centre of the response would be the National Fuel Plan, which was published in 2024. It contains a section on how to respond to a fuel supply disruption or emergency.

This is a relatively generic plan and not specifically designed just for a situation where supply from overseas has been compromised. There are “many events” that could disrupt fuel supply, ranging from earthquakes to pipes being sabotaged to a damaged road network limiting truck movement.

Level 1

The first stage in what is described as the “Escalation Levels for Fuel Response” is where there is a “minor” impact on the fuel sector, but this “may escalate”. This is where New Zealand is currently.

The Fuel SCE – which is made up of officials as well as representatives of key fuel companies – is monitoring the situation and “planning for potential escalation” at this level. The fuel companies are doing their own planning for potential disruption.

Other officials from emergency management groups are looped in on what is going on.

Level 2

Level 2 is where there is a “moderate” impact on the fuel sector, and “critical customer prioritisation measures” are invoked.

If New Zealand were to move to this level, customers would still be able to get fuel, but there is a “risk of shortages to critical fuel customers”. The Fuel SCE would be monitoring demand levels, resupply options and co-ordinating Government support.

The critical fuel customer prioritisation measures invoked at this stage could include having designated fuel retail outlets just for these customers, designated lanes at stations, or mini-tankers on-site. A decision could be made to direct fuel companies to prioritise these customers.

What are critical fuel customers? They would be specifically named organisations viewed as “critical to response activities and have a reliance on fuel resupply to carry out response activities”. These would include emergency services, as well as the likes of the Ministry of Health, Corrections, and Defence.

The plan says security arrangements may need to be organised at the outlets to “maintain a safe working environment for site personnel”. Police may need to be involved “with providing community support and reassurance, maintaining law and order and providing crime prevention advice at fuel retail outlets if required”.

Level 3

Next is level 3, reflecting a “major impact” on the country’s fuel sector, where “additional fuel management measures” are required.

“Serious impact on fuel distribution with severe resource and capacity constraints and multi-region and/or major impacts to critical customers,” is how the plan describes this level.

The Government has powers, including under the Petroleum Demand Restraint Act 1981, to impose mandatory fuel demand constraints.

These could include:

The legislation does contain provisions to restrict, regulate or prohibit the use of cars. However, the Finance Minister has said this is not something currently needed.

Level 4

The fourth and final level is where there is a “severe” impact.

“Actions as above, plus fuel companies to supply only critical fuel customers and these customers to be serviced by any supplier,” the plan says.

Beyond this escalation level system, the National Fuel Plan also contains a host of other options to help ensure supply to critical customers. This includes increasing the capacity carried by road tankers or allowing more truck movements (for example, in bus lanes).

There is a lot New Zealanders could do voluntarily as well. If the country were at risk of running low on fuel, it’s likely the Government and the fuel sector would encourage Kiwis to conserve fuel.

“This can be achieved through reducing speed on open roads, carpooling, working from home, checking tyre pressure and reducing unnecessary trips or using other transport modes,” the plan says.

“This is only considered a practicable option when managing a long-term supply disruption where immediate stocks are not at threat (panic buying will be a likely result otherwise).”

Jamie Ensor is the NZ Herald’s chief political reporter, based in the press gallery at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist in 2025 for Political Journalist of the Year at the Voyager Media Awards.