The ‘good reasons’ the Government is keeping its cool about fuel amid cost crisis

Friday, 24 April 2026

Fuel prices have surged in the wake of the US-Israeli war against Iran.

David MacLeod is the National MP for New Plymouth

OPINION: The cost of fuel is, understandably, on everyone’s minds. So is supply.

As of the latest fuel update at the time of writing, we had cover for 51.2 days of petrol, 41.6 days of diesel and 47.4 days of jet fuel – which is not too far off what we had before this conflict in the Middle East began.

The price at the pump, however, has changed considerably. Rising fuel costs reflect scarcity and the global market, and punch everyone in the pocket.

It’s easy to consider the worst-case scenario. To look ahead and imagine what happens if we run out of fuel and supply chains crash, or even if prices continue to rise and stay high for a long time.

Not everyone needs support to get through the fuel cost crisis, says David Macleod. (File photo)

The flip side is that it could all be over tomorrow or next week, and back to normal in a few short months.

But the reality is that right now, we’re OK as far as fuel supply goes.

The government is responding to the crisis by holding the line. We’re trying to support those who need it most instead of indiscriminately handing out money to people who may not be concerned about a $20 to $30 difference on a full tank of 95 unleaded.

So, we’ve introduced targeted relief for low-income working families. Parents need to be able to afford to drive to their jobs and take their kids to school. Rural and isolated schools and families are also getting help.

Minister of Finance Nicola Willis and Prime Minister Christopher Luxon have made it clear assistance will be timely, targeted and temporary.

We acted quickly to give a 30% increase in mileage reimbursement rates to home and community support workers after the urgent need for it was raised in Parliament.

Building and Construction Minister Chris Penk was recently in Taranaki to hear what local business concerns were. (File photo)

These might seem like small things, but they are timely, targeted, and temporary. We don’t want to spiral into a Covid-esque reactionary response which leads to sky-rocketing cost of living.

We’ve released the four-phase Fuel Response Plan 2026 and set up a Fuel Security Ministerial Oversight Group which is responsible for deciding whether a shift between phases is appropriate.

So far, more than six weeks into this conflict, we’re still in Phase One, and carefully monitoring the situation. We want to plan thoroughly, be cautious in our response, act early and be in the best position possible to respond however we need to.

When I hosted Minister Chris Penk for a day in New Plymouth recently it was clear from the questions from local businesses that there is concern about the cost of fuel, especially as time goes by.

Venture Taranaki’s recent survey of businesses shows the same thing. Businesses are worried about viability with increasing costs not just to transport, but also lifting supplier prices, squeezing margins and less customer demand.

It can be easy to forget that it’s not just about the fuel we fill our personal cars up with, but the delivery of consumables to and around the country, the running of primary industry plant and equipment, essential service vehicles – emergency responders, milk tankers, hearses.

As I’ve heard from one businessperson, the cost of plumbing pipes has spiked because oil is used to make PVC.

The Venture Taranaki survey suggested temporary fuel tax and RUC relief, clear information and advance warning about fuel supply and any prioritisation, and targeted support for freight, primary sector and other fuel-dependent businesses would all help.

These are all things I will take back to my colleagues in Wellington, but what we have made clear is that the Government would have to spend and borrow heavily for non-targeted temporary fuel tax and RUC relief, and it’s risky.

If it turns out to be more than a short-term measure, the increased inflation and debt would place significant pressure on future governments and budgets, which all trickles down to businesses and consumers. We don’t want to push the issues of today onto our future selves.

We all want stability and certainty, but right now the crystal ball is cloudy and we’re at the mercy of the conflict in the Middle East.

But Penk’s message was that nothing is off the table. Measures are being considered. We’re working hard to make sure that whatever happens, we have enough fuel to protect not just people, but also jobs, livelihoods and the wider economy we are all part of.