Government has to front up on who’ll get the fuel: energy security expert

Friday, 1 May 2026

Almost a month ago, Finance Minister Nicola Willis committed to consult with industries over which ones would be in line for fuel faster than others in a shortage situation.

But businesses still remain in the dark, and energy security analyst Nathan Surendran has a few questions about why.

“It's now four weeks later, nearly. Where is the allocation plan?” Surendran said in an interview with The Post.

“Without being alarmist, the reality is that we're moving into a phase where globally, the fuel reserves and buffers in the system are being depleted over the last couple of months,” Surendran said.

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Fewer ships appear to be coming to the country, while fuel stocks remain in very slight decline. The official line is that the supply of fuel is OK, and there’s no need to panic.

Meanwhile, the country has a four-level national fuel plan that outlines measures to be taken if fuel supplies dry up, but New Zealand remains at level 1.

Australia has already moved to phase 2.

A spokesperson for Willis said officials were analysing the feedback and an update was expected in about two weeks.

“We are going to be running short on fuel in coming months and whether New Zealand can continue to outbid nations that are less able to afford it and secure supply for ourselves is an open question,” Surendran said.

Reduced refinery production from New Zealand’s main fuel supplying nations, Singapore and South Korea, would create a bottleneck.

Prime Minister Christopher Luxon will travel to Singapore soon for the signing of the Agreement on Trade in Essential Supplies, to keep trade flowing in times of crisis and supply-chain disruption. He’s also there for the inaugural Singapore-New Zealand Leadership Forum and meetings.

While refineries are independent commercial entities in Singapore and Korea, when shortages start to bite the situation would quickly become politicised and at that point “a country like New Zealand, that is really sitting on its laurels and basically saying, everyone else do all the hard work, we don't need to conserve fuel. We can buy it at a price that others can't,” said Surendran.

“It is not really, diplomatically, a good look”.

Domestically, if the strategy goes bad, consumers will inevitably have to change the way they do things - and changes could include the likes of car pooling to work with neighbours or colleagues.

“Those sorts of things, I think, will become more necessary over time,” the energy analyst said.

It was important for people to understand this would not be a temporary disruption to fuel supply, he added. The French government has estimated 30% to 40% of the total fuel infrastructure in the Persian Gulf region was damaged or destroyed by the war. And it would take at least two or three years to rebuild.

“If things escalate from where they are now, then that situation is going to get materially worse.

“So we are potentially looking at a situation where the fuel supply becomes unavailable at any cost for certain periods of time. Hopefully it would will be just the occasional missed shipment,” he said.

Foreign fuel suppliers had contracted fuel for the next three months and were assuring customers there were no problems.

“But those suppliers are buying fuel on a futures market, which may, or may not, be actually available,” he said.

The latest fuel update showed stocks were slightly higher with 52.8 days of petrol cover in country and on the water, 46.1 days of diesel and enough supply of jet fuel to cover 49.1 days.

But on the other side of the world, problems are compounding. Kuwait earlier this month notified customers it was invoking contractual clauses allowing it to withhold certain scheduled deliveries of crude oil and refined petroleum products , including to Singapore and South Korea.

The “force majeure” meant a “fair chunk of their crude supply”was now undeliverable, Surendran said.

“We're talking 10, 15, 20% shortfall in outright supply in coming months, best case scenario,” Surendran said, adding that the Government appeared to have backed itself into an ideological corner.

“It's an asymmetrical risk environment. The risk of being right about upcoming fuel shortages, and doing something to prepare and reduce the impact by demand reduction and conservation measures now, is immeasurably better” than holding off until it was too late.

“Let's hope it doesn't get that bad. Let's hope we have a little bit of intermittency of supply … to wake people up to this risk,” he said.

There was a fear the squeakiest wheel would get the oil, or fuel in this case - and certainly trucking was one sector that had achieved some cut through with the Government to keep goods moving.

Transporting New Zealand chief executive Dom Kalasih welcomed moves to potentially allow some trucks to carry more weight, easing time and access restrictions for over-dimension vehicles and removing some restrictions on the routes those vehicles could travel.

'These are practical productivity gains that will deliver immediate relief to businesses and consumers around the country. Modest increases in payloads and more efficient routes mean fewer trips, lower fuel use, and reduced vehicle operating costs across the supply chain,' Kalasih said.

Heavier trucks use more diesel, but increased payloads reduce the diesel intensity per tonne of freight moved, he said.

But even trucks were being parked up as high diesel prices started to impact energy intensive activities such as construction and log harvesting, and some customers delayed moving warehouse stock.

“Unless we get some downward pressure on transport costs this is going to seriously impact economic growth and jobs,' he said.