Advice sought on legal powers if oil supplies dry up
Tuesday, 10 March 2026
The Government is taking advice on what legal powers it could use if major oil companies stop shipping fuel to New Zealand.
Associate Energy Minister Shane Jones was speaking after the price of oil rocketed up past US$110 a barrel on Monday as the impact of the Iran war on the global energy market roiled the world.
He said BP had to be “very careful” it did not bump New Zealand off any schedule for shipments even if higher profits were available elsewhere.
'They have a schedule and they have obligations to meet to New Zealanders, and they need to bear in mind that any short-term profit taking will have long-term negative implications on their social license,” Jones said.
“I’ve got them in my line of sight.”
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Iran war: Labour sees case for cutting fuel taxes, but ACT doesn’t
Crude oil prices surpass US$100 a barrel as the Iran war impedes production and shipping
Asked if the Government might step in if this happened, Jones said his offices were looking at “what pieces of legislation we would have access to if this situation deteriorates markedly”.
His comments come as petrol prices headed towards $3/litre and the Government rejected a call to immediately lower fuel taxes to respond.
Finance Minister Nicola Willis said she had asked the Commerce Commission to closely monitor fuel prices and “call out any suspect pricing behaviour by retailers.”
Willis is leading a new ministerial group, featuring Jones, that will monitor the impact of the war on New Zealand’s economy.
She said the Treasury had advised there may be additional inflation of 0.5 to 1% if the conflict continued for three months or more - and negative 0.2 to 0.4% on real GDP.
She stressed these figures - pulled from a range of scenarios - would depend heavily on the shifting sands of the conflict.
PM says no fuel rationing likely - but old laws still on books
Willis was eager to reassure New Zealanders that the country had adequate supplies of fuel both in the country and on the way within our exclusive economic zone.
The Ministry of Business Innovation and Employment (MBIE) say the country had roughly 50 days’ supply of petrol, diesel and jet fuel, with about half physically in the country and the other half in ships on their way.
“Currently no fuel companies have reported issues with supply chains. We've spoken to the industry and not experienced any issues at this point in time,” Willis said.
Prime Minister Christopher Luxon said the Government’s contingency plans did not include rationing fuel and instead looked at getting other supplies in through supply chain agreements - such as one with Singapore that promised New Zealand fuel in times of crisis, and pledged Singapore food.
“We have quite a lot of optionality. I think we're incredibly well positioned to deal with that,” Luxon said.
Asked directly if the Government had started thinking about how it might ration demand for fuel if needed, Luxon said it hadn’t.
However the Government’s National Fuel Plan, finalised in 2024, has measures for rationing demand including limits on how much each person can buy, reduced opening hours for petrol stations, prioritisation of certain users and restrictions of sales into containers.
These powers are contained in decades-old laws such as the Petroleum Demand Restraint Act 1981, but a spokesperson for MBIE noted there was no plans to use such powers at this stage.
Willis rejects fuel tax cut
Finance Minister Nicola Willis has rejected calls from the Taxpayers’ Union to cut fuel taxes.
The right-wing lobby group had argued households already struggling with the cost of living should not have to wear the burden of war-driven price increases.
But Willis pushed back with pragmatism, pointing out any cash saved at the pump - but foregone in tax revenue - would have to be made up elsewhere.
“We’re not considering [fuel tax cuts] at this stage,” she said.
“I’d love to be able to say I can take the pain away right now but I'm conscious that short-term gain could lead to longer term pain.”
Labour in Government slashed the fuel excise duty (FED) and road user charges (RUC) by 25 cents a litre in March 2022 in response to a global energy crisis triggered by the war in Ukraine.
It then had to top up the shortfall in the National Land Transport Fund (NLTF) that funds major roading projects.
Luxon was broadly supportive of Labour cutting the fuel tax in 2022, saying the cuts would provide “some relief”.
However Willis suggested some openness to postponing a planned fuel tax rise of 12c a litre in 2027, which was needed after the current Government deferred all planned fuel tax rises this term.
Transport Minister Chris Bishop said last week that rise and further ones after it were necessary for the Government to fund its roading programme.
Labour leader Chris Hipkins said the Government should “keep all of its options on the table”. He was not willing to suggest a threshold that might trigger government intervention.
BP have been asked for comment.