The Government has secured an additional 90 million litres of diesel from Z Energy — equivalent to around nine days’ supply — to strengthen New Zealand’s fuel reserves and improve resilience against global supply shocks, Finance Minister Nicola Willis and Associate Energy Minister Shane Jones say.
Following a competitive procurement process, the Government has signed a letter of intent with Z Energy to supply the diesel, which will be stored at Marsden Point.
Willis says the agreement is designed to provide a buffer against ongoing volatility in global oil markets.
“Reliable fuel supply is essential for households and businesses. We have prioritised securing additional diesel because it is the fuel that drives the economy.
“We are taking a measured, responsible approach and believe this agreement, alongside the other work the Government is doing, will help strengthen our fuel security and give reassurance to Kiwis.”
Under the deal, the diesel will be delivered either as a single shipment or across two cargoes, with the Crown retaining control over when the fuel is released into the domestic market. The Government says its exposure to any long-term decline in fuel prices will be limited.
Jones says the additional supply will sit outside existing minimum stockholding requirements for fuel companies and will be stored at Marsden Point in Northland.
“This is a practical, forward-looking step that will help ensure New Zealand has more resilience at a time of global fuel market uncertainty. It strengthens both our fuel and economic buffers and reduces the potential impacts of international supply disruptions from the ongoing conflict in the Middle East.
“Channel Infrastructure is working at pace to deliver a refurbished tank that can hold more than 90 million litres by early June. The Government earlier this month signed off an investment of up to $21.6 million from the Regional Infrastructure Fund to acquire this extra capacity.”
Jones says Z Energy’s proposal was selected through a process run by the Ministry of Business, Innovation and Employment after Cabinet agreed in March to seek commercial options to strengthen fuel supply resilience.
“Z Energy’s proposal delivered the strongest overall advantages, providing value for money alongside practical flexibility around how and when the additional fuel could be used.
“Z Energy will procure, own and manage the volume of diesel under the agreement but the Crown will control its release into the New Zealand market.”
The move comes as the Government looks to bolster fuel security settings amid ongoing geopolitical tensions and supply chain risks, with diesel identified as a critical input across freight, agriculture and industry.
