Car-less days? Government mulls Muldoon-era fuel mandates as prices soar
Thursday, 12 March 2026
The Government is considering how it could use Muldoon-era legislation to limit demand for fuel, as petrol prices surge past $3 per litre.
Fuel prices are sky-rocketing as a result of the US-Israel war with Iran, which has closed a critical shipping route used to transport about a fifth of the world’s crude oil.
The Government’s Ministerial Economic Security and Supply Chains Group met for the first time on Wednesday night, and considered old legislation which was used to ration fuel during the Robert Muldoon Government in the early 1980s.
That legislation, the Petroleum Demand Restraint Act, gives ministers power to force car-less days, limit the sale of petrol, or provide fuel coupons to ration access.
Those “demand-side” interventions would hopefully not be required, said Nicola Willis, the minister leading work for economic security.
“Those steps would only be necessary if we were seeing genuine disruption to our ability to get fuel beyond the 50 days of storage that we currently have,” she said.
Willis said ministers were considering when that act could be needed, and how it could be used.
“What we’re doing as ministers, responsibly, is saying, ‘let’s think ahead’. If we got to it, what would the trigger be? Under what circumstances would we have to consider that? But I just assure New Zealanders, that’s not on the table right now,” she said.
Associate Energy Minister Shane Jones said the Government had started “policy work” to shore up a plan for if the Iran war continued.
Asked if the Government was considering bringing back car-free days, Jones told Stuff that ministers had asked Treasury to consider “all the options”.
“Those will only kick in, in the event that this situation deteriorates further. We do have up to 50 days worth of fuel either on the water or here in country,” he said.
This week, the impacts of that surging fuel price have clearly reached New Zealand. For households, the cost of 91 unleaded surged past $3 per litre on Wednesday - reaching up to $3.24 in parts of the country.
Airlines have also been hit, with the cost of jet fuel doubling. Air New Zealand cancelled more than 1000 flights. Air Chathams, Air NZ and Jet Star all confirmed they would increase fares in response.
Labour leader Chris Hipkins said fuel prices surging above $3 per litre would major stress on household budgets.
“When we last saw a spike in petrol prices of this magnitude, the last Labour government did cut fuel taxes to support New Zealanders through that,” he said.
He said this Government should consider cutting fuel taxes - which amount to $1.30 per litre of 91. He also said he wouldn’t support fuel rationing or car-less days.
Earlier this week, Willis dismissed suggestions of cutting fuel taxes, saying it would create “long term pain”.
On Thursday, she slightly changed her answer - saying everything was on the table depending on how bad the situation became.
“At this point, we need to not have a knee jerk reaction… but I’m not ruling out that if the situation escalates further, and there are ongoing and considerable price hikes, that we wouldn’t look at the fuel tax excise,” she told Stuff.
Hipkins said the point at which fuel was unaffordable in 2022 was $3 per litre.
He and Willis wouldn’t name a price-point at which they thought fuel would be so unaffordable that Government intervention was, once again, required.
“Anything that we do, we need to consider how long we might need to keep doing that for, what the cost will be, and what holes it creates in the Budget elsewhere,” Willis said.
She said the immediate focus was on shoring up the supply of fuel.