Government announces fuel support for rural and isolated schools

Monday, 20 April 2026

New Zealand has roughly 50 days of fuel cover despite the 'volatile' Middle East conflict. The Government is targeting support toward relief teacher travel and rural school transport as fuel prices put pressure on the economy.

The Government has announced immediate fuel support for rural and isolated schools.

Thirty-seven million dollars will be invested to replace diesel boilers across 70 schools, removing dependence on diesel for warmth and and protecting schools from future fuel price shocks, Education Minister Erica Stanford announced on Monday.

This investment will replace diesel boilers in 65 state schools, and up to five state-integrated schools. The upgrade is expected to save around 600,000 litres of diesel per year.

Stanford said about 20 schools have been identified as being simple to transition and eligible for easy alternatives like heat pumps. The transition for these schools will be complete by the end of the year.

For larger schools, or schools with a greater reliance on diesel, the work will take longer. “We will have to replace the diesel boilers with alternative central systems, including infrastructure changes, pipes and potentially even transformer upgrades,” Stanford said.

“There are a handful of very large schools where this work will take longer due to their size and the complexity of the infrastructure, but all of the work, including those big, really tricky schools, will be completed by the end of 2028.”

Prime Minister Christopher Luxon and Education Minister Erica Stanford speaking at Monday’s post-Cabinet press conference.

Mileage rates for relief teachers will also be increased - from 37 cents to 83 cents per kilometre for vehicles, and from 15 cents to 31 cents for motorbikes - effective immediately. The increase will stay in place for 12 months or until fuel prices drop below $3 per litre for four consecutive weeks.

“Relief teachers play a valuable role throughout our schooling system. To support staffing in our schools, particularly through the winter months in rural and isolated communities, the Government has … agreed to a temporary increase to Relief Teacher Transport Allowance mileage rates, which I am confident the unions will support,” Stanford said.

Fuel prices soared in March as the Iran war closed the Strait of Hormuz. Stats NZ reports diesel jumped 43% and petrol 18%, causing a record-breaking spike that economists warn will flow into supermarket shelves by spring.

Schools pay these mileage rates through operational grant funding, meaning smaller schools are likely to struggle with this increase. As a result, schools with less than 100 students will receive a one-off $2500 grant to cover this.

Asked why that was capped at 100 students, “schools with either less than 50 or less than 100 students have a much smaller operational grant, and they’re just having more difficulty in soaking up some of these extra costs,” Stanford said. “Whereas bigger schools with bigger ops grants will be slightly easier for them to accommodate that.”

As for families, the conveyance allowance - paid to parents of children where no school bus is available or where they live more than 2.4km from the nearest bus route - is increasing by 30%. This will benefit 5000 students and will also stay in place for 12 months or until fuel prices drop below $3 per litre for four consecutive weeks, Stanford said.

These moves come after the Ministry of Education asked every school where they were feeling the impact of fuel cost pressures the most.

“These measures are carefully targeted to where fuel costs are having the greatest impact,” Stanford said.