NZ fuel reserves kept secret

Photo: RNZ
Photo: RNZ
Officials are refusing to release briefings about how much fuel New Zealand has or should keep on shore. 

In April New Zealand became totally reliant on tanker-imported fuel, after the Marsden Point Refinery ended processing.

It came amid a widespread international focus on resource security, as the Russian invasion of Ukraine and shutdowns of European gas pipes disrupted international supplies and prices of food and fuel. And as shipping and logistics routes suffered ongoing bottlenecks triggered by the pandemic.

But despite an RNZ Official Information Request, officials refused to release ministerial briefings about how much fuel New Zealand had or should keep on shore.

In February, Minister of Energy Megan Woods said none of New Zealand's fuel supply was from Russia or Russian products, and the The International Energy Agency had advised that world oil production capacity could meet any disruptions caused by the Russian war on Ukraine.

New Zealand also had access to strategic reserves overseas, she said.

But in March Woods asked officials to hurry up with a report on mandatory onshore holdings.

The Ministry of Business, Innovation and Employment told RNZ it had since provided two briefings to her.

However it said because the minister was still considering them, it would not release them to protect the confidentiality of the advice

But potential supply vulnerabilities were crucial concern given the wider international environment, a Christchurch commercial lawyer who specialises in infrastructure and construction said.

Buddle Findlay special counsel Bassam Maghzal has said it is vital that New Zealand carefully consider its minimum onshore stockholding requirements for fuel wholesalers in case of fuel supply shocks.

Rationing, such as New Zealand's 'carless days' imposed during the 1979 fuel crisis, might not be such a distant prospect as it once was.

"One would assume a 'carless day' is part of New Zealand's efforts to decarbonise the economy - but this risks missing the point about New Zealand's energy security and how quickly our economy could unravel if New Zealand was deprived of sufficient fuel supplies for as little as 24 days," Maghzal said.

And, while relying completely on international supply meant New Zealand was no longer so exposed to a single-point vulnerability where disruption to refining at Marsden Point could have created problems, "if New Zealand was unable to physically import refined fuels, we won't be able to refine the oil we produce locally."

The long delay for shipping to reach New Zealand also made it vital that enough reserves be held, he said.

If changes were made to increase the amount of fuel reserves held onshore, the sooner plans were set in motion the better, Maghzal said, as there would likely be a lag before those amounts could be met.