‘Do nothing’ national fuel plan leaves NZ exposed, economist warns
Wednesday, 15 April 2026
Economist Shamubeel Eaqub has taken a shot at New Zealand’s four-stage national fuel plan, saying that it’s along these lines: “do nothing, do nothing, do nothing, and then, oh f..k”.
To be fair to the Government, the stages of the recently released Plan are actually called “watchful”, “precautionary”, “managed”, and “protected”. And the country is still sitting firmly at stage one - “watchful” - even as a flare up of the US/Israel v Iran war, and potentially a US v China war, continues to stymie a huge swathe of the world’s oil supply through the Strait of Hormuz.
But either way, Eaqub, chief economist for Simplicity, told The Post, New Zealand was not properly prepared for what might be coming.
The outspoken economist recently wrote a piece for his followers on Linkedin in which he explained that on paper New Zealand had 50-58 days of supply, including on water, and the Government activated its IEA obligation on March 12, releasing about six days of fuel as part of a global 400-million-barrel release.
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“But the IEA release works via tickets, contracts for oil held offshore in the United States, the United Kingdom and Japan. Will a paper reserve in Texas [become] fuel for a truck in Palmerston North?”
Furthermore, he said, not all of what we do hold onshore is available to use - “storage facilities carry tank bottoms and line pack, fuel that has to stay in the system to keep the pumps working. Strip out of the dead stock and the supply available is considerably less than the headline figure.”
Price focus
Eaqub said that a focus on oil prices - which are really futures prices - is obscuring the true state of what is happening on the ground. Like stock markets, which in the US are fairly buoyant on the back of improved sentiment, global standard oil prices track market sentiment but differ significantly from the 'real' price being paid for physical oil in New Zealand or anywhere else, or as Eaqub would have it: “I don't care what the futures price is - can I get the fuel?
And that is the difficulty, obviously, because not only are refineries in South Korea and Singapore finding it really hard to secure supplies, but Korea, our largest supplier, is very dependent on Naptha, a liquid hydrocarbon mixture, primarily used as a key feedstock for producing gasoline, plastics, and synthetic materials. Because the Middle East supplies 54% of all naphtha imports to the Asian petrochemical sector, the effective blockade by Iranian forces has triggered a collapse in supply.
Things like fertiliser are impacted too - and while New Zealand may suffer short-term shortages, it will eventually, most likely, find the money to pay for it. But for poorer countries and those in the global south, famine is becoming more and more of a possibility.
Then there was the long-term issue of damage and destruction of 80 oil refineries in the Middle East that have been bombed, attacked and otherwise degraded. The IEA has described the destruction of not just the refineries but also oil fields, natural gas plants, and export terminals as 'the largest energy security threat in history'.
Response
Eaqub did not want to comment on why official figures like the prime minister might appear to be taking a relaxed view of the situation. But he did observe that there was a desire to avoid a “top-down” approach that would be too reminiscent of the Covid response.
“But for most participants in the market, we do require a really good understanding of what triggers would move us into the next phase [of the national fuel plan] - what are the triggers to move us up the plan, and what then happens? Those two things are really quite critical, because it makes it so much easier for everyone to plan.”
He agreed there was not a need to panic, and right now fuel stocks were sufficient, but the planning would be needed from May or June onwards, if things continue along the current trajectory.
“Things like having some focus or clarity around who our essential workers or essential industries are - of course we can’t call them ‘essential’ because that harks back too much to the pandemic response - but it's not very difficult for us to do that, because we can figure out what we need for saving lives, for feeding ourselves and to keep the country going.”
It would be easy to distinguish who those essential workers and industries were, as they had, ironically, already been identified through the pandemic response.
There was the more mid to long-term impact of a lack of consumer confidence and spending which would also need to be addressed in various ways, but that differed from the immediate issue of knowing precisely what we’d be doing if things went south.
“We don't have to turn everything off either - because we are a relatively rich country, we will still be able to access things at some point in time. So any disruption is likely to be short-lived compared to a lot of other places.”