She warned on Monday of potential "acute cost of living pressures" ahead, but said fuel excise tax would not be cut, partly because it would encourage people to use more petrol.
Asked about the "worst case scenario" predicted by Treasury - Willis said she had been told in the event of a prolonged conflict in Iran, inflation in New Zealand could reach 3.7%.
She said ministers were meeting daily on the issue, two-and-a-half weeks into the US-Israeli assault on Iran.
"We're also going ahead with a weekly strategic meeting at which further decisions are being taken. We're also receiving written situation updates twice daily. And of course, I updated Cabinet today on our strategy to date."
Willis said there were three parts to the strategy - first, a focus on "mitigating the impact of the war on critical supply chains".
She said on March 8, when the last update from the Ministry of Business, Innovation and Employment was issued, there was enough petrol either in the country or on the way for 57 days; diesel, 49 days and jet fuel, 47 days.
Thirteen vessels were on their way to New Zealand already, and three more set to leave soon.
The next update was due on Wednesday, and Willis said work was under way to make releases more frequent.
"It has been observed and reported on that demand at some petrol stations has increased, and we will factor that into our future updates."
She said New Zealand's largest fuel import terminal had not seen "any issues" with supply.
"Petrol prices have risen about 45 to 50 cents a litre, adding about $23 to the cost of filling an average car. We are acutely conscious of the impact this will be having for many New Zealanders.
"Diesel prices have risen about 72 cents a litre, adding about $36 to the cost of filling an average diesel vehicle.
"Despite these increases, prices are still slightly below their 2022 peak, although it is reasonable to assume they could go higher."
Willis said the government was "anticipating, and to the extent possible mitigating the impact on the New Zealand economy, including what could potentially be acute cost of living pressures for some households".
She said she had spoken to bank bosses who had assured her they would provide "an umbrella to businesses" they worked with.
"From the government's point of view, we need to ensure that any support we provide to households is temporary, is targeted and is timely."
She said official advice was that reducing fuel excise would "send the wrong signal" and not be sufficiently targeted.
Panic-buying discouraged
Earlier this morning drivers were urged not to panic-buy fuel as motorists worry about rising prices.
Petrol stations across the country are seeing a surge of drivers filling up as petrol prices rise.
Petrol price monitoring app Gaspy said the average price of 91 petrol is now above $3 and has risen 20% since the start of the month.
Spokesperson Mike Newton said the average national price at the start of March was about $2.50 per litre.
He said it had been rising quickly.
The rise in prices was largely due to the conflict in the Middle East.
US President Donald Trump is calling for countries to send ships to secure the Strait of Hormuz, which is effectively closed as Iran launches attacks to halt maritime traffic.
The area is critical because around 20% of the world's oil consumption or 20 million barrels a day, usually passes through it.
It has resulted in several petrol stations running dry over the weekend.
Newton said most of the petrol stations running low on gas seemed to be Gull.
"It's not a supply problem, they have plenty of fuel in the tanks. It's just they have to get it into the tankers and get it to the stations. Hopefully we'll start to see that be alleviated in the next couple of days."
He said the average price was now just 6c away from the level it reached when the government cut the fuel excise tax, after the Russian invasion of Ukraine.
"We're starting to get into that territory and this government has said they're less interested in doing that... so it'll be interesting to see when the pressure starts to build."
Willis this morning said the government was carefully monitoring fuel stock levels.
New Zealand has around 32 days' worth of fuel in the country and 25 days in ships on the way to the country.
"There is no current issue with the availability of fuel," Willis said. "Were that to be the case, we would get very good forewarning because we would be aware of fuel companies reporting to us that orders had been disrupted or cancelled. They have not made any reports of that sort to us at this stage.
If we got that warning, Willis said we would have several weeks to plan for it.
"This is why we have these minimum stock holdings in the country, so we don't get ourselves into a panic situation."
She said the government hasn't needed to review its sanctions on Russian-origin oil.
"This is, obviously, an event that is unfolding; if there are changes in that position, we will review them when they occur."
Waitomo CEO Simon Parham said demand at the company's petrol station has increased by about 15%.
"We've had the odd run out from here and there, but it's really been for a maximum of 30 minutes," he said.
"What we are seeing is that increase in demand, coupled with a very stressed driver system, anything from a delay at the terminal to a truck breaking down, it's just caused that slight delay in he system, so you have a slight run out.
"There's nothing to worry about."
He expects to see the demand soften.
"We're still in good shape... There's no need to panic. Yes, we are suffering from high prices, which is tough on everyone, but there is no need to panic at the moment."
He said if the cargo orders can't be placed, that's when New Zealand may need to look at managing stock.
"If we are staying around that 50-day mark, that's a rolling 50 days, then we're fine. If we start to see that drop back, then that's when we have to manage stock," Parham said.
Westpac chief economist Kelly Eckhold said next month will be very difficult if things don't improve.
"The refiners in Asia are going to run out of feed stocks to be able to continue to produce at the levels we are used to," he said.
"I think if we are sitting here in mid-April and things haven't improved, I think we will be looking at the possibility that everybody is just going to have to rein things in a bit."
Brent crude has been sitting around $US100 ($NZ172) a barrel, but if it reaches $US150 a barrel, Eckhold said that's when the real damaging impacts on businesses and consumers would be seen.
The owner of a bus company said more people could opt for public transport over private vehicles.
Kiwi Coaches owner Dayton Howie said petrol price rises were cutting into margins.
He said the costs were currently being absorbed, but it was unclear how long that could last.
Howie said students could miss out on school trips if fuel prices keep going up.
