The government has announced it is holding $450 million in reserve to address further shocks caused by high fuel prices amid the ongoing conflict in the Middle East.
Delivering Budget 2026 today, Finance Minister Nicola Willis said it was an “emergency savings account” that she hoped the country wouldn't need, pointing to forecasts of falling fuel prices, including a predicated average petrol price of $2.71 per litre, The New Zealand Herald reports.
The $450m fund, limited to the 2026/27 financial year, added to already announced fuel support and resilience measures from the Government, which included a $50 weekly increase to the In-Work tax credit, $150m to increase fuel storage and increases in mileage rates for home and community support workers and patients who are travelling for treatment.
The tax credit and mileage rate increases are temporary and are set to expire after 12 months or when the price of 91 Octane petrol falls below $3 per litre for four straight weeks.
“It is prudent to be prepared for a downside scenario and if that occurs, I want New Zealanders to have the confidence the Government has the fiscal buffer to respond.”
The United States/Israel war with Iran has caused global fuel shocks, almost completely choking supply through the Iran-controlled Strait of Hormuz where about 20% of the world’s oil originates.
While ceasefire talks have increased in recent weeks, the threat of ongoing strikes hasn’t abated, meaning the global disruption could persist.
