Iran War: Megan Woods fights claim Marsden Point closure ‘fatally wounded’ fuel security

Friday, 13 March 2026

Labour energy spokesperson Megan Woods has hit back at Resources Minister Shane Jones’ criticism of the previous government’s handling of the Marsden Point refinery closure.

However, she acknowledged Jones deserved some credit for regulating to increase the amount of diesel that fuel importers will need to have on hand in future.

New Zealand would still be reliant on imports to meet its fuel needs had the refinery remained open, as the country produces only a small amount of oil from wells in Taranaki.

However, a surge in refining margins overseas since the turmoil in the Middle East began has added to the impact of rising oil prices.

Read more:

• Government decided not to follow through on idea of talks to save refinery

• Shane Jones: What the Government is doing to secure NZ’s fuel supply amid Iran war

• Shane Jones says Government will investigate reopening the Marsden Point oil refinery

• Marsden Point set to become NZ's first ‘special economic zone’

The closure of the refinery didn’t change New Zealand’s reliance on imports, Woods said.

“It just shifted what we were dependent on, whether it was crude or finished product. If we had a refinery, we’d have exactly the same issue around the Strait of Hormuz and tankers not being able to get through.”

Jones said the refinery closed down in 2022 with “the approval” of the then-Labour government.

“Our fuel security situation was fatally wounded once Labour shut down Marsden Point,” he told The Post on Tuesday.

The decision to close the refinery was made by its majority owners, the major petrol companies, with Z Energy among the main proponents.

As The Post reported in 2021, the former Labour government considered but decided not to follow through on the idea of trying to save the refinery by underwriting its operations for a period of up to 10 years.

The National Party had proposed the oil refinery could be kept in a state of standby, so it could be turned back on in the event of a crisis that impacted international fuel supply lines.

Woods advised her Cabinet colleagues in 2021, when she was energy minister, there was “not a strong case to support the refinery’s operations on fuel security grounds”.

But she said then she was open to beginning discussions with Refining NZ on a loan or underwriting deal that could ensure the refinery stayed open for perhaps five or 10 years, citing “broader considerations”.

Her advice said a loan or similar underwriting facility could support Refining NZ through “the current period of low earnings”, which Woods had expected to persist for two to three years, with the reasonable prospect of repayment if or when refining earnings returned to adequate levels.

It is understood Woods’ idea for those negotiations was not ultimately endorsed by her fellow ministers.

Her advice had said a scenario in which New Zealand was unable to import fuel — now a potential risk being contemplated as a result of the conflict in Iran — was unlikely “but not entirely implausible”.

NZ First campaigned in the 2023 election on policies that included looking into attempting to re-open the refinery, which was largely dismantled immediately after its closure.

But Jones conceded last year that re-opening the refinery would be “stupendously expensive” and nowhere near the horizon given the Government’s fiscal challenges.

Commenting on his aspirations, Woods said Jones “wanted people to picture a refinery that's running on ‘good old Kiwi oil”.

“But the reality is, Taranaki crude could supply less than 5% of what Marsden Point needed.”

Woods gave Jones credit for keeping in place a regime that Labour started as a result of the closure of the refinery to require the country’s fuel importers to keep 28 days’ worth of petrol, 24 days worth of jet fuel and 21 days worth of diesel on hand or on ships bound for the country.

And also for announcing in April last year that the diesel-holding requirement would increase to 28 days, at least for the three largest of the five fuel importers.

But she criticised Jones along with the rest of the Government for weakening other policies that would reduce the country’s fossil-fuel dependence, such as incentives for EVs and the Clean Car Standard.