Back in the world of Levels 1-4. Here are the fuel alert levels, and when we might need them

Wednesday, 18 March 2026

On Monday at 1pm, finance minister Nicola Willis sat down with reporters to give an update.

She said New Zealand is currently at Level 1, although moves to higher levels are possible. The key focus in Level 1 is preparation. Things are manageable now, but they could escalate.

Sound familiar?

No, this isn’t about Covid-19. You haven’t leaped back in time and there’s no pandemic threatening the country.

But there is something threatening to destabilise households - the price of fuel.

With the conflict in Iran showing no signs of stopping, fuel prices are skyrocketing around the world. Here in New Zealand, 91 is already over $3.15 in some places and Air New Zealand is pro-actively cancelling flights.

In good news, the government has a framework to follow to manage stretched resources. The National Fuel Plan, which was developed by fuel companies, central and local government and released in 2024, lays out a response framework for the fuel sector when things get tight.

It sets out roles for government agencies and - something familiar for most New Zealanders - criteria and likely responses under four different severity scenarios.

Those are called Levels 1 to 4.

That may prompt Covid-19 flashbacks for some, but these levels offer an insight into what could be coming.

So, let’s unpack it.

Level 1

New Zealand is currently at Level 1 of the National Fuel Plan. This is like Alert Level 1 of the Covid-19 response framework: most things are operating normally, but preparations should be made for a move up the levels.

While Covid-19 preparations meant reviewing business continuity plans and considering the impact that higher levels could have on services, fuel preparations mean convening a Fuel Sector Co-ordinating Entity (Fuel SCE) - which includes representatives from key government agencies as well as fuel companies - and monitoring the evolving situation.

There are no measures in place to restrict fuel consumption, but fuel companies will be reporting back to the Fuel SCE on the status of their fuel stocks and signs of any supply disruptions.

Level 2

This is the next step if New Zealand’s fuel outlook worsens.

At Level 2, most customers will still have access to fuel where and then they want it.

But there would be a risk of shortages to critical customers, meaning some prioritisation measures could be implemented. These could include implementing designated pump lanes for critical customers at petrol stations, or prioritising re-supply to certain sites.

‘Critical customers’, according to the plan, can include individuals buying fuel for work vehicles (like electricity linesmen), individual critical workers buying fuel for personal vehicles that are required to travel to work (like nurses), and larger entities purchasing fuel to maintain critical services.

Among these groups, “fuel demand should be reduced as far as practicable without compromising services,” the plan noted.

The Government has not given a clear trigger point for when we could move to Level 2, if at all. But Willis told reporters on Monday that she does not “anticipate moving to a higher level in the plan until we were to see any actual disruption in ships being able to come to New Zealand”.

“I am advised that further mitigations under the [plan] are at least three to four weeks away,” she added.

That message was echoed on Resources Minister Shane Jones on Tuesday.

“Were we to see a ship bringing fuel to New Zealand being diverted, or were we to see an extreme run on resources, then our Cabinet would receive recommendations from the bureaucracy to intervene,” he said.

“It is important that everyone bear in mind, we’re operating within the statutory envelope - 50 odd days of fuel either in NZ or on the water. But, look, we’re not blind to the prospect that circumstances could change very quickly unless we see an early cessation to the conflict in the Middle East.”

Level 3

If we hit Level 3, things are getting more serious.

Hold ups in the fuel supply chain would mean there are “severe resource and capacity constraints across regions”, which would be affecting those critical customers outlined above.

That means more fuel management measures could be needed, on top of any implemented at Level 2.

These could include mandatory demand constraints (such as temporary closures of fuel retail outlets or Government interventions under the Petroleum Demand Act), or fuel prioritisation for critical customers.

On the demand side, the plan explicitly references restricting petrol station opening hours, setting maximum purchases by price or volume, and restricting sales into containers like jerry cans.

On prioritisation, the plan envisages reducing the percentage of stock allocated to commercial customers, with the difference allocated to critical customers.

These sorts of demand and prioritisation measures would be put in place under the Civil Defence Emergency Management Act (if a state of emergency was in place) or by the Minister of Energy (if a petroleum emergency was in place).

Level 4

The detail on Level 4 is sparse.

But being at this level would mean that national fuel supplies are severely impacted, with “resource and capacity limits well exceeded”, the plan says.

Any measures put in place at Levels 2 and 3 would continue, but it’s possible only critical customers would be supplied at designated fuel retail outlets or at other designated distribution points (e.g. to refuel generators at critical sites).