Iran War: Government could consider ‘targeted support’ if petrol rose towards $4 a litre
Monday, 16 March 2026
Finance Minister Nicola Willis is not playing down the possibility of petrol rising towards $4 a litre, or ruling out fuel rationing or targeted financial support for consumers, as concerns grow over the fallout from turmoil in the Middle East.
“I am already hearing from New Zealanders who are feeling pain now. When you hear speculation of the number kicking up past $3 towards $4, I know that’s really frightening for people who are worried about how they make their budget,” Willis said during a briefing on the fuel situation on Monday.
“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 you through that’.”
Willis said that, as of midnight on Monday last week, stocks of petrol, diesel and jet fuel were all “normal”, with 57 days’ worth of petrol and 49 days’ worth of diesel in the country or on its way to New Zealand.
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But if the Iran conflict was prolonged, “there could be a point in the future at which fuel importers do face challenges securing orders”, she said.
“That is because the Asian fuel refineries, which New Zealand imports most of our fuel from, do typically rely on the Middle East for their stocks of oil.”
If needed, the Government would mitigate the impact of the war on critical supply chains, “including consideration of steps that may be needed to ensure the resilience of New Zealand's industrial and economic capacity”.
New Zealand was in a better position than less wealthy countries but needed to prepare for a situation in which there wasn’t enough refined fuel coming out of Asian refineries and if it encountered delays switching to source it from other markets such as the United States, she said.
Willis, who is heading the Government’s response to the fuel situation, said she was still awaiting advice on the price fuel could reach.
The worst case scenario officials have been modelling for would be the conflict potentially lasting “through the rest of this year”, she said.
Treasury officials had estimated that overall inflation could climb to 3.7% by the end of the year, she said.
But Willis indicated even that would not threaten an economic recovery.
“They still see the New Zealand economy growing strongly this year. The lowest rate of growth that they forecast in the scenarios they shared with me was 2.5%. That is a healthier rate of growth than we experienced last year,” she said.
Willis effectively ruled out reducing fuel excise duty in response to rising prices, saying that would “send the wrong signal at this time”.
If the Government was to provide assistance to people impacted by the price of fuel, that would be “timely, targeted and temporary”, she said.
“Clear in my mind is ‘the mother potentially living in South Auckland’ who has no choice but to use her car each day to get to her cleaning shift at the airport as there is not a bus available for her at that time and who is facing acute income pressure.
“We need to make sure that we have in mind those New Zealanders who face the most acute cost-of-living pressures, rather than having blanket responses.”
Despite acknowledging the potential for temporary fuel shortages if the conflict dragged on, Willis indicated she had little appetite for encouraging motorists to ease off the accelerator — for example by not driving at 110 where that was allowed — or to work from home to conserve fuel.
“I’m very reluctant to adopt the role of the schoolmarm telling people what to do with their own lives,” she said.
“I think most Kiwis understand that if you’ve got less stuff in the back of your car, don’t drive as fast or carpool with a neighbour, you use less fuel. They don't need me giving them a lesson on that.”
Willis put stock in an agreement the Government had with Singapore with a view to enhancing one another’s resilience.
“New Zealand is working around the clock through our diplomatic networks to make sure … our needs in terms of ongoing fuel supply are understood and prioritised,” she said.
The price of Brent crude for May delivery edged up by about US$2 to trade at just over US$105 a barrel shortly after markets opened at noon, New Zealand time, but was little changed on Friday’s close at just over US$104 a barrel at 3pm.
Data released by the Australian Institute for Petroleum indicated the price importers pay for unleaded petrol in Asia reached a new peak of just above A$210 a barrel on Friday.
That was up more than 80% on the price that prevailed before the conflict in Iran began on February 28.
The relevant wholesale benchmark for diesel eased very slightly on Friday but was still more than double its pre-conflict price.
Petrol stations appeared to be continuing to push through price rises today.
The number of petrol stations still selling 91-octane petrol at less than $3 a litre appears to have declined sharply, according to price comparison site Gaspy, with many now advertising a sticker price of $3.10 to $3.20 — compared to about $2.50 pre-conflict.
The price of diesel has risen more steeply, with motorists reporting prices of between $2.60 and $2.80 a litre at most service stations, up from about $1.90 a litre before the conflict.