Here’s what the Government probably won’t do about the global oil squeeze

Monday, 16 March 2026

Finance Minister Nicola Willis sat down with reporters on Monday to provide an economic update amid the global fuel crisis and talk about some of the measures that are on the table to help New Zealanders cope with rising prices.

Forty-five minutes later, the message was clear: We’re still in a holding pattern, and the New Zealand public is none the wiser about what help could be dished out, and - if it is - when.

But we do know it is being considered.

“What I am candidly sharing with you today is that … were [fuel prices] to get to levels where we think it was putting acute cost of living pressures on households, then we would consider a timely, temporary and targeted response,” Willis said.

So, support is on the Cabinet table. But what could it look like?

That’s still the question.

Fuel tax relief and cost-of-living payments unlikely

Willis was quick to say that New Zealanders should not be hopeful of wide-ranging relief in the form of fuel excise cuts and cost of living payments.

Amid the cost of living pressures and global energy crisis of 2022, the then-Labour government provided a 25c fuel tax subsidy and a one-off $350 cost-of-living payment to hundreds of thousands of Kiwis.

Neither of these are likely to happen again.

Ministers have been advised that “simply reducing fuel excise would not be the right [approach]”. They would go too far and “end up supporting households like mine and Chris Luxon’s, who, frankly, don’t need it,” Willis said.

Instead, the Government is open to more targeted options that would support low and middle income New Zealanders, she said.

But it would need to be through an existing, viable mechanism.

“I am mindful that the cost-of-living payment famously ended up in the back pockets of French backpackers, dead people and many others. It was a novel mechanism, and was not effective in reaching those who were most in need,” Willis said.

No sign of a public transport subsidy either

In 2022, the then-Labour government also introduced a public transport subsidy to help New Zealanders with the rising cost of living. The half-price fare policy was later extended into 2023.

Asked if this was something on the current Government’s Cabinet table, Willis suggested it was not.

“Our key focus is on ensuring the availability of public transport. Public transport in New Zealand is already subsidised both by central government and local government, there are many, many buses available, and many spare seats available on those buses,” she said.

Asked again about the cost of public transport, Willis said the advice she has received is that when petrol prices go up, so does public transport use.

“We just simply want to be assured that that is available to people and is functioning in a way that where possible, there’s a choice,” she said.

The alternatives

So, no fuel subsidies, one-off payments or reductions in public transport fees. What might the Government consider?

On this, Willis was less clear.

Whatever support the Government did introduce would rely on existing mechanisms and meet three core criteria, she said.

“One, it cannot add more pressure to inflation. That would be cutting off our nose to spite of our face.

“Two, we would need to be confident that it was prudent and sustainable within the fiscal strategy that we have set out.

“And three … the support would be timely, temporary and targeted.”

But asked if that could include extra payments through Working for Families, or some other process using the benefit system, Willis said she is “not going to speculate on the tool or mechanism”.

And when would this happen?

The final piece of the puzzle is when the Government will start to implement targeted support - if at all.

The Labour Party’s key criticism, offered by finance spokesperson Barbara Edmonds in a press conference on Monday afternoon, was that the Government was moving too slow.

“The Government needs to come forward with New Zealand. I agree and acknowledge the targeted timeliness that was in the Covid report. But ultimately … the Government needs to speed up their work, given that it has been two weeks and [Willis] hasn’t taken a paper to Cabinet yet,” Edmonds said.

Willis pointed a few times to the Royal Commission of Inquiry into Covid-19’s final report, released last week. This noted that “if fiscal stimulus is considered necessary in a future pandemic, measures should be timely, temporary and targeted”.

The current Government is taking care to apply those principles here.

However, Willis would not identify a point at which the Government might step in.

“The first number I have in my mind is the number in the bank accounts of those New Zealanders who are most up against it. Those people who work really, really hard and might really, really be struggling to get to and from work,” she said when asked whether she has a figure in mind that could trigger government intervention.

“The second number I have in my mind is the more than 100 billion dollars worth of debt that the last government added, and which the country is still trying to pay off.”

Willis said she wants to offer New Zealanders clarity, when she can.

“Look, I’m already hearing from New Zealanders who are feeling pain now, so I’m conscious that that’s the backdrop. And … when you hear speculation of the number kicking up past $3 towards $4, I know that that’s really frightening for people who are worried about how they’ll meet their budget.

“And so I want to be able to give them some more clarity about if that were to occur, how quickly we would expect that to occur, and at what point the Government would say, here's some temporary support to help.”

But for that clarity, we will have to wait a bit longer. Willis is working with Treasury on a range of options.

Once those have been clarified, she’ll tell her Cabinet colleagues. The media can hear about it after that, she said.