Rationing is irrational - don’t let bureaucrats decide who gets petrol
Saturday, 21 March 2026
Josie Pagani is a commentator on current affairs and a regular opinion contributor. She works in geopolitics, aid and development, and governance.
OPINION: So, Prime Minister, do you still support “any action” including war?
President Trump has lost control of the war and whines that Europe won’t help. That’s what happens when you threaten to invade Greenland, tariff Europe, abuse its democracy and disparage international law.
He lifts sanctions on Russia while they arm Iranians to kill Americans. He is begging for help from China. China is noticing that the US has more power on display in the Strait of Hormuz than in the Strait of Taiwan.
The military cost far exceeds the sums saved by abolishing US aid. I’m no economist, but how do you think the cost of bombing compares to the benefits of savings lives?
Read more:
Iran War: Government could consider ‘targeted support’ if petrol rose towards $4 a litre
Iran War: Coupons for petrol, bans on containers - how fuel-rationed NZ might look
The US is in an escalation trap in the world’s most combustible region. Stop and Iran’s vicious, terrorist-sponsoring theocracy will continue to hold the Strait of Hormuz hostage. It wins by surviving.
Escalate, draw more countries in, and if you want to know how that goe, look up Vietnam and Iraq. It takes 20 years.
Israel’s theory of war is to keep killing everyone in the Iranian security structures until someone emerges who agrees to give up.
Iran is not falling apart yet, so it’s hard to see shipping moving freely around the Persian Gulf any time soon.
Man is born free but everywhere we are in supply chains. Rousseau’s point was that we are greater slaves to others than we realise. We are slaves to the quantity of oil and gas getting out of the Persian Gulf.
Oil won’t run out. Eighty per cent of the world’s oil comes from other places. Even New Zealand exports nearly a billion dollars a year of oil to Australia, Singapore, China and South Korea.
But, when demand exceeds supply, prices rise until enough demand is knocked out. Pump prices deter using your car, persuade you to buy an EV, or work from home.
This Trumpflation will hurt the poorest hardest. Nicola Willis is right to focus on targeted support through the tax system.
But the Government’s talk of “worst case scenarios” and possible rationing shows they have learnt nothing from the mistakes of Covid, when local fruit shops and butchers were wiped out and supermarkets preferenced.
I want to start a campaign: No rationing. No subsidies.
In rationing, officials in Wellington decide whether you provide an essential service. If you do, you get allocated some petrol or an exemption from a carless day. But there is no way to tell whether a nurse uses the car to drive to brunch on the weekend.
When we tried carless days in the 1970s, about 25% of drivers were able to get an exemption. Many bought a second car to drive on another day. Fuel consumption reduced by only 3%.
We have a better rationing system already in place: price.
It is painful when prices rise for people who cannot avoid it. Targeted support works. Rationing doesn’t. It doesn’t make more fuel available. It only chooses who gets it. Good luck if you don’t employ your own lobbyist.
What makes more petrol available is prices and competition.
Nicola Willis could have said to business, “we may not have enough petrol in three months. Start making your own arrangements.” She could look at taxing windfall profits of petrol companies and using the proceeds to help hard-pressed families.
Instead she called the oligopoly petrol companies to the Beehive and asked them to come up with a scheme. That isn’t going to involve competitors entering the market with independently sourced supplies.
What she should have said was: “I will hold you accountable if we run out, and so will every New Zealander.”
When Christopher Luxon ran Air NZ, a pipeline that carried fuel to Auckland was ruptured. Both the airline and the airport were high hazard businesses with risk management frameworks. They must have looked at the risk that a digger might go through the pipeline on which they depended, then decided it’s cheaper to cancel flights than to build increased storage to manage that risk.
That’s why I have limited sympathy for businesses that did not hedge by buying political risk insurance or options to buy extra fuel if needed.
If businesses didn’t know there was a risk that conflict might metastasise in the Middle East, and that fuel supplies might be disrupted, well congratulations. You’re the prime minister.
If we haven’t stored enough fuel there needs to be a consequence.
New Zealand agrees through the International Energy Agency to a scheme where we don’t end up like supermarket shoppers stockpiling toilet paper. But private entities are not bound by that.
Independent businesses could contract shipments of refined petrol under hedge contracts, and the government could help support that.
Government does have levers, but should not pull the ones that move us from bad to worse.
Rationing, carless days and closed butcher shops during Covid are shining icons to economic failure and community breakdown. They should not be on the menu.