‘Oil for lamb’ and panicking pensioners: How New Zealand weathered the last oil shock

Saturday, 28 March 2026

Just before 4am one Sunday morning, a Christchurch freezing worker named Gordon Marks was pulled over on Bealey Ave.

He had been driving erratically after a party, his last drink a few hours behind him. He was slightly over the breath-alcohol limit. But he had also committed a more unusual offence: using his car on a Sunday, making him the first person in the city to be fined for driving on their ‘carless day’.

It was the kind of moment only possible in an increasingly interconnected world. A revolution in Iran had rippled across the globe, landing, improbably, on a hungover Cantabrian on a dark inner-city street.

Nearly half a century later, similar disruptions are again exposing how vulnerable New Zealand remains to forces beyond its control.

The oil shocks of the 1970s revealed deep structural weaknesses in the economy and triggered a wave of government interventions that swung from the cautious to the faintly absurd, from speed-limit cuts and petrol sales restrictions to carless days and, later, the sweeping energy projects of the Think Big era.

1973: The first shock

The first jolt came in 1973, when OPEC (the Organization of the Petroleum Exporting Countries) imposed an oil embargo on countries that had supported Israel during the Arab-Israeli war. Global oil prices quadrupled within months.

New Zealand wasn’t specifically targeted, but the timing was unfortunate. The country was heavily dependent on imported oil, while its exports were under strain due to the changing trade relationship with Great Britain.

About 7% of the global oil supply was impacted, far less than the approximately 20% affected in the current crisis. But the economic damage was deep and lasting. New Zealand’s current account balance swung from a 2.5% surplus to a 13% deficit. House prices fell and inflation pushed toward 18%. The stability of the post-war economy suddenly looked uncertain.

The Government’s response, by later standards, was relatively restrained. Speed limits on open roads were cut to 80kph as a fuel-saving measure, a policy that would quietly persist for more than a decade. Petrol sales on weekends were banned.

Stricter rules allowing for carless days and petrol rationing were passed but never implemented. The embargo ended, markets stabilised, and while prices remained higher, the system held.

1979: The second shock

Just as the economy began to recover, the second shock hit.

The Iranian Revolution of 1979 replaced the pro-Western Shah — who had visited New Zealand five years earlier — with Ayatollah Khomeini's theocratic government, sending fresh turmoil through oil markets. This time, New Zealand was exposed.

About 39% of its crude oil imports came from Iran, roughly double the share of any other OECD country. The country had quietly built a heavy dependence on a single, volatile supplier.

Initially, officials were calm. In late 1978, Energy Minister Bill Birch predicted modest price rises of about 10% and said supply disruptions were unlikely. Fuel rationing was not seriously being considered.

Within weeks, those assurances looked misplaced. By March, Iran was preparing to auction oil to the highest bidder, threatening a sharp spike in prices. New Zealand officials had already signalled plans to ban petrol sales on weekends, but it was clear deeper cuts to consumption were needed.

One proposal was “carless days”: each vehicle would be banned from the road one day a week.

Views on the idea were mixed. It was reportedly favoured by Birch, but less so by the top Ministry of Energy official, who publicly said he preferred rationing.

There was brief hope of a workaround. A front-page article in The Press suggested — with seemingly thin evidence — that Iran might be willing to barter its oil for lamb. It was not entirely fanciful: at the time, Iran was New Zealand’s second-largest market for frozen lamb after Britain.

That possibility collapsed when Khomeini reportedly banned frozen meat imports, apparently on religious grounds.

(Lamb exports resumed after New Zealand agreed to slaughter meat according to halal practices).

Meanwhile, anxiety was building at home. Petrol stations were overwhelmed. Thursday queues became chaotic as motorists tried to fill up before weekend sales bans.

One Christchurch petrol station worker described the scenes on Thursdays as “mad” and “crazy”. Another saw a pensioner filling their tank with 27 cents worth of fuel; The Press described pensioners holding things up by filling their cars with “the dribble from the bowser nozzle”.

Public sentiment was also sceptical. A Press survey of local commuters found roughly half of respondents believed the Government was “putting on a scare”, with little appetite for meaningful behaviour change.

The measures ultimately proved insufficient. The Government said consistent reductions of 10% were required to avoid carless days, but by June, Prime Minister Robert Muldoon said carless days were a certainty.

The Government had already ordered millions of windscreen stickers printed in eight colours, one for each day of the week, plus another for exemptions.

A carless daze

The scheme began on July 30, 1979. It was declared a disaster almost immediately.

On the first day, police were flooded with requests for exemptions. These ranged from the understandable — medical emergencies, sudden changes of plan — to the absurd, including one person who wanted to visit a sick pig. With little guidance on what constituted grounds for an exemption, most requests were denied.

Over time came general public dissatisfaction with the scheme. Households with multiple cars could stagger their carless days and continue driving as normal. Rural people reported driving into the city to get their exemptions, increasing their petrol usage.

A study by University of Otago students found vehicle numbers had not dropped as much as expected, which a Press editorial said confirmed “a general impression that carless days are resented and are increasingly being disregarded by private motorists”.

A University of Canterbury economics professor concluded that most of the drop in petrol use could be explained by rising prices, not the scheme itself.

Still, there were side effects. Bicycle sales flourished: one Christchurch retailer described it as “like Christmas all year round”.

Buses filled up, especially on Wednesdays, the most popular nominated carless day. Traffic dropped. Even telephone exchanges reportedly clogged at certain times as people tried to shop by phone instead.

Carless days ultimately lasted almost a year, with pauses over Christmas and Easter. By the end of 1979, fuel stocks at ports fluctuated between 28 and 35 days of national consumption, similar to the amount on hand when the scheme began.

When the policy was suspended in May 1980, there was widespread relief. Drivers were told to keep their stickers in case it returned. Many did not.

There was significant debate about whether it accomplished its goals. The scheme had become unwieldy; of the 1.7 million stickers printed, about 472,000 were exemptions. Only an unlucky few, like Gordon Marks, were punished for breaking the rules.

Birch later said fuel use had dropped 3.5% against a projected 1.5% increase — a modest gain that likely reflected multiple factors, not just carless days.

Aftermath

The twin shocks forced a reckoning. New Zealand’s reliance on imported energy was no longer sustainable.

That contributed to the Think Big programme of the early 1980s; an ambitious, debt-funded attempt to insulate the economy from global volatility. Gas fields were developed, synthetic fuels produced, and major infrastructure built.

When oil prices collapsed later in the decade, many of those projects became uneconomic, leaving sizeable public debt. Their legacy helped set the stage for the sweeping market reforms of Rogernomics.

What follows the current crisis may not look like carless days or synthetic petrol plants. But if history is any guide, it will leave marks just as deep.