Hon Shane Jones
Associate Minister for Energy

The minimum stockholding obligation for diesel importers will increase from 21 to 28 days’ cover, bolstering New Zealand’s diesel reserves and resilience to supply disruptions, Associate Energy Minister Shane Jones says.

The Coalition Government consulted on the proposal late last year and has agreed that from 1 July 2028, fuel importers that have more than a 10 per cent market share must hold an additional seven days’ supply onshore.

“We use around 11 million litres of diesel every day in New Zealand, and it is vital for the economy - from food production and distribution to emergency electricity generation and the movement of essential goods and services,” Mr Jones says.

“While the chances of a severe and sustained fuel disruption are low, the consequences for Kiwis and our economy would be catastrophic.

“Our diesel reserves are lower than reserves for other fuel types, meaning we are particularly vulnerable to supply disruptions. The Fuel Security Study I released in February found our diesel cover of 21 days in reserve could be tight to manage, even for a minor disruption.

“Building our resilience must carefully balance the risks with the cost of mitigation to the sector and ultimately consumers. A reserve of 28 days is a good compromise and means we will be able to better ride out smaller disruptions and, in the event of a major supply event, it will give us time to get solutions in place.”

Fuel security continues to be a priority for the Government as work progresses on a Fuel Security Plan for New Zealand, a commitment in the New Zealand First-National Coalition Agreement. The plan is expected to be delivered later this year.

“Establishing the requirement to hold more diesel reserves from July 2028 allows operators enough time to determine how to incorporate additional diesel into their networks and if necessary, to build or refurbish existing tanks,” Mr Jones says.

The minimum stockholding obligation for diesel importers with a market share of less than 10 per cent will be reviewed next year.

© Scoop Media