Wednesday, June 19, 2024

MBIE work to prioritise fuel resilience

The Ministry of Business, Innovation and Employment (MBIE) has announced it will halt work on procuring reserve diesel stock and explore other ways to bolster New Zealand’s diesel resilience.

Associate Energy Minister, Shane Jones says the Ministry will also begin work on changes to the minimum fuel stockholding (MSO) regime.

A secure and resilient supply of engine fuels is critical to the economy and, as nearly all engine fuels are imported, New Zealand is particularly vulnerable to international and domestic supply disruptions, he said.

“Ensuring New Zealand holds enough reserve stocks to ride out disruptions is a key pillar of fuel security and while the risks of supply disruptions are low, the consequences of a severe and sustained disruption would be significant,” said Mr Jones.

Legislation introduced in 2023 will require fuel importers to hold 28 days’ worth of petrol, 24 days of jet fuel and 21 days of diesel from 1 January 2025.

“A proposal for the Government to investigate funding 70 million litres in reserve diesel stock and its storage was also committed to at the time. Procuring additional reserve diesel carries significant capital cost. Cabinet will need a robust understanding of options and their impacts before making decisions.”

MBIE will seek the public’s views on what the level of cover should be for New Zealand’s diesel stock and options for achieving that through a discussion paper later this year.

Today’s announcement adds to the comprehensive work programme already underway to bolster New Zealand’s fuel security, which includes commissioning a study into New Zealand’s fuel security requirements and working with industry on their plans to increase jet fuel resilience at Auckland Airport, said Minister Jones.

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