The Marsden Point refinery probably wouldn’t be the saviour Shane Jones is telling you it is. Here’s why

Wednesday, 25 March 2026

It’s not often that a peninsula at the southern head of the Whangārei Harbour becomes the centre of attention in Wellington.

But with a global fuel crisis driving New Zealand’s stocks of diesel, petrol and jet fuel directly into the public consciousness, Marsden Point has become just that.

After a few weeks of murmurings at the edge of debates, disagreements about the role the former oil refinery could have played in the current crisis - and who decided to close it down - reached a fever pitch on Tuesday.

“Sadly, Marsden Point was closed down by the Labour government,” associate energy minister Shane Jones told Stuff.

“There is an option to recommission some of the storage. I understand a proposal is floating around, and I've sought advice … but the only reason we're having to recommission Marsden Point storage is because Megan Woods closed it down.”

This is something Jones has been telling journalists for weeks. But today, he took it to Parliament. Pointing to Woods across the House, New Zealand would have had 700 million litres of storage if “that woman” had not closed the refinery, he said.

But Woods, who is the former Minister of Emergency and Labour’s energy spokesperson, disagrees.

“That is nonsense,” she retorted when Stuff asked her about the claims.

“The government needs to stop saying that and tell New Zealanders what the plan is for the coming weeks and months ahead.”

So, once again, volleys of insults and accusations between politicians have muddied the waters of fact.

Even the Prime Minister got in on the action on Tuesday. He was asked by the Speaker to withdraw his comment that the former refinery’s closure “was a decision of a previous government” during Question Time.

But the burning question is still out there - who was responsible for the closure of the oil refinery at Marsden Point? And if it was hadn’t closed down, would it help us now?

Let’s fact check it.

First - some context. In 2022, New Zealand’s only oil refinery closed down.

That was a big shift - prior to 2020 the refinery supplied about 65% to 70% of New Zealand’s total demand for refined fuels and 100% of our jet fuel.

Stuff covered the development at the time. But the long and short of it is: it struggled to compete with bigger refineries in Asia which had economies of scale and access to cheaper electricity, Covid-19 hit hard, and the future demand for fuel wasn’t looking strong.

So the company, then called Refining NZ, now known as Channel Infrastructure, cut its losses and closed. (Channel Infrastructure still operates by the way). The site was converted into a fuel import terminal, where up to 300 million litres of petrol, diesel and jet fuel are stored.

Now, let’s get to fact-checking.

Claim: the previous Labour government shut Marsden Point oil refinery

According to repeated claims from Shane Jones - and on Tuesday, the Prime Minister - the Marsden Point oil refinery was closed by the previous Labour government.

This is not true. Refining NZ was a private company and, as Labour leader Chris Hipkins said on Tuesday, the closure was a “private business decision”.

But Jones later elaborated, claiming that the Labour government “made a reckless decision and approved the closure of Marsden Point”.

Again, this isn’t entirely true.

According to Cabinet papers from the time, the then-government did consider the impact that the the closure would have on New Zealand’s fuel security, and contemplated intervening to keep it open.

A paper taken to Cabinet by Woods in November 2021 noted that “Refining NZ has not sought a subsidy or other assistance to maintain its oil refining operations”, but “some parties have suggested delaying the refinery’s closure by five or 10 years.”

Woods went on to note that she did not think it would be reasonable for the government to support extending the refinery’s life to address “an exceptional ‘no fuel imports’ scenario”.

This referenced advice from officials, which basically said the closure would have little impact on fuel security except in a “low likelihood but high consequence event” that left New Zealand with no ability to import fuels for a sustained period of time.

To be clear - we have not yet reached that sort of event in 2026. Officials advised in 2021 that a less severe disruption, such as a loss of 50% of fuel imports for one month (again, something we have not yet reached), would be more likely but have little impact from the refinery’s closure.

Noting this advice, Cabinet chose not to intervene.

Claim: if the refinery was still open, New Zealand would have better fuel security

Woods has hit back strongly at claims that New Zealand would be in a better position today if the refinery was still operational.

“The situation in terms of Marsden, is that we did not refine our own crude oil. That is a fantasy that has been peddled by government ministers, that we were refining good old New Zealand oil,” she said.

New Zealand workers refined “Middle Eastern crude oil” at the Marsden Point plant, she added, basically saying we would be in the same position regarding crude oil stuck on the wrong side of the Strait of Hormuz.

This aligns with Woods’ 2021 Cabinet paper, referenced above, in which she noted that “in an emergency the refinery could potentially refine domestic crude oil (from Taranaki) at some level”.

However, in a footnote, officials noted: “Refining NZ advises the Marsden Point refinery cannot produce fuels solely from light Taranaki crude oils without significant reconfiguration that would take years to plan and implement. This suggests the refinery could not be relied upon to provide resilience to the ‘no fuel imports’ disruption scenario, but would provide some resilience if suitable crude oils can still be imported.”

Taranaki oil could be used to supplement oil imported from overseas - to an extent - but modelling completed in 2022 showed that would only add an extra 2.6 days of cover (based in 2019 demand levels), assuming 15 days of imported crude stocks were already on the water.

So in short, we’d still need Middle Eastern crude oil, officials advised.

Claim: if the refinery was still open, New Zealand would have an additional 700 million litres of fuel storage

Speaking to Stuff after Question Time on Tuesday, Jones focused his criticisms of the Marsden Point situation onto storage.

The reason that we’re in this situation is due to “the decision to close down 700 million litres worth of storage. Therein lies the problem,” he said.

That’s slightly different to what he told Stuff before Question time: Marsden Point has “700 million litres worth of storage, and about half of it is currently functioning,” he said then.

Jones said he has been talking to industry leaders about re-upping storage capacity, with the Port of Taranaki able to provide three days worth of storage capacity if needed. (However, two-thirds of that capacity is owned by Methanex, and “I'm in no hurry to chase Methanex out of New Zealand,” Jones said).

The head of the current Marsden Point facility has sent through a proposal to re-purpose two of the tanks from the old refinery, but “because of the degradation since the closure of the refinery, it will take time,” he noted.

So the Government is looking at options. But are they right to say the refinery’s closure reduced storage capacity?

For this, we need to go back to the Cabinet papers.

When Cabinet decided not to intervene to save the Marsden Point refinery, they directed officials to investigate increasing minimum fuel stock-holding obligations.

This was needed because the refinery closure meant we no longer have “crude oil and intermediate products” held on shore. The only fuel we have on hand - or on the water - is that which has already been refined elsewhere.

That’s how we got to our current minimum stock-holding obligations - 28 days' worth of petrol, 21 days' worth of diesel and 24 days' worth of jet fuel.

But the important thing here is what we lost. According to officials in 2023 (when these minimums were being worked out), the reduction in the amount of petrol, diesel and jet fuel available in New Zealand post-refinery closure was about 100,000 tonnes - or five days of New Zealand’s fuel consumption.

According to Woods on Tuesday, that is “not substantial” in the current context.

This story has been updated to clarify that Channel Infrastructure operates.