The Fuel Industry (Improving Fuel Resilience) Amendment Bill has passed its Third Reading and will ensure New Zealand has sufficient petrol, diesel and jet fuel during major disruptions and weather events, Energy and Resources Minister Dr Megan Woods said today.
“Although the risk of such a disruption is very low, it could cost the economy hundreds of millions to billions of dollars,” the Minister said.
“Strengthening our national fuel resilience is a critical issue that the Government is addressing through the Fuel Industry (Improving Fuel Resilience) Amendment Bill.
“This puts in place a minimum stockholding obligation for the five fuel importers with the right to draw fuel from bulk storage facilities. A fuel importer’s average stockholding level will need to be able to provide 28, 24 and 21 days of cover for petrol, jet fuel and diesel respectively.”
The Bill also includes introducing regulation-making powers so that the obligation can be adjusted as needed, said Minister Woods. These powers could include, for example, introducing new stockholding requirements for different fuel types or different locations, or specifying requirements for disclosing information relating to fuel supply resilience, she said.
“It’s a big step forward for New Zealand in boosting our fuel security. It’s also an important one given the changing geopolitical environment and uncertainties in international oil and fuel markets.”
“I’m very conscious of making sure the obligation doesn’t translate into higher prices for consumers. We’ve engaged with the industry in developing this Bill, and determined volumes of fuel reserves that mitigate the effects of a major disruption, while also limiting additional costs on fuel importers.”
Alongside the obligation, the Government will collect more detailed information about fuel stocks, international supply chains and contingency arrangements. This will allow for a more accurate assessment of New Zealand’s fuel resilience and help identify opportunities to improve fuel resilience, said Minister Woods.
“The Bill also sets expected dates for implementing these two measures, which provides certainty to the industry on the path ahead. The additional information disclosure requirements on fuel importers are expected to come into effect on 1 July 2024, and the stockholding obligation by 1 January 2025,” she said.