2026 Fuel Prices & Security of Supply

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Ultimate Geek
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#3475107 29-Mar-2026 16:47

If the state is going to subsidise stuff, it shouldn't be at the petrol pump because that would worsen an already emerging shortage. What should be subsidised instead is decarbonisation of the car & truck fleet, even if it takes years to filter through.

"I regret to say that we of the F.B.I. are powerless to act in cases of oral-genital intimacy, unless it has in some way obstructed interstate commerce." — J. Edgar Hoover

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wellygary

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#3475159 29-Mar-2026 17:27

gzt:
MBIE”S Botched Diesel Supply Numbers: How Did They Get This So Wrong?

I have not followed that in detail. My impression is that was a result of what was required to be included and how the data was presented at that time. It strikes me as a bit silly. More or less reporting a taxpayers union lobby group press release. Like Wayne Brown continuing to rant about the number of road cones when Wayne Brown has been the boss in council for the last three years. The government minister is the person ultimately responsible for those figures and reporting - Nicola Willis. While I haven't followed it this looks more like taking pressure off Willis than anything else.

It Became a huge beat up,

The TDLR was that assumptions were made based on incomplete data... (The shipments) - This ended up with the "11 days of supply after easter" . which was not the same published number as the "Stocks in country+ stock on water number"

What should have happened is the media should have gone back to MBIE and asked "why are these figures different".. but nope , . and it spread...

Eventually the reason for the difference appeared, which was that ships currently unloading were not included in the details of the "shipments"...or the current stock in NZ...

Obraik

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#3475160 29-Mar-2026 17:31

deepred:

If the state is going to subsidise stuff, it shouldn't be at the petrol pump because that would worsen an already emerging shortage. What should be subsidised instead is decarbonisation of the car & truck fleet, even if it takes years to filter through.

I mean...we had that and it worked - we're seeing the benefits of it today with a good variety of used EVs on the market. But, the current governments propaganda on the scheme won.

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mattwnz

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#3475161 29-Mar-2026 17:33

deepred:

If the state is going to subsidise stuff, it shouldn't be at the petrol pump because that would worsen an already emerging shortage. What should be subsidised instead is decarbonisation of the car & truck fleet, even if it takes years to filter through.

Reducing tax isn’t subsidising it, as they are making a huge windfall due to the extra tax they are collecting from GST. But I can’t see how it makes things worse as we don’t have a shortage at the moment. The problem is if we actually cut back at the moment, we don’t have the storage capacity for that fuel to be stored. That is why they aren’t telling people to cut back. The problem is future incoming ships with supply. High fuel prices mean everything increases in price. If they give out money to certain people, then the people that miss out end up subsidising those that get the handout and pay more for everything and increases inflation. But removing tax from fuel reduces everything increasing in price and helps keep inflation under control

Handle9

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#3475164 29-Mar-2026 17:35

mattwnz:

deepred:

If the state is going to subsidise stuff, it shouldn't be at the petrol pump because that would worsen an already emerging shortage. What should be subsidised instead is decarbonisation of the car & truck fleet, even if it takes years to filter through.

Reducing tax isn’t subsidising it, as they are making a huge windfall due to the extra tax they are collecting from GST. But I can’t see how it makes things worse as we don’t have a shortage at the moment. The problem is if we actually cut back at the moment, we don’t have the storage capacity for that fuel to be stored. That is why they aren’t telling people to cut back. The problem is future incoming ships with supply. High fuel prices mean everything increases in price. If they give out money to certain people, then the people that miss out end up subsidising those that get the handout and pay more for everything and increases inflation. But removing tax from fuel reduces everything increasing in price and helps keep inflation under control

Reducing the price of fuel in a supply crisis is absolutely the wrong move. It breaks the supply and demand relationship.

You can't subsidise your way out of a supply shortage.

BlakJak

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#3475165 29-Mar-2026 17:50

You can't subsidise your way out of a supply shortage - true.

But keeping a bit of an eye on the rest of the economy is also called for. The knock-on effects of fuel costs skyrocketing are negative to the economy-at-large as people will have less money to invest in anything/everything else, and the possibility of actually running out of diesel and wrecking the national distribution network for goods is catestrophic.

Only the government can (could) have smoothed out the fuel supply situation by building (or rebuilding) strategic reserves that could have reduced the immediate impact (note: still not a long term fix if supply can't keep up with demand; price increases are a valid way to reduce demand as well noting the side-effects above). But failing that, we are where we are.

Reducing unnecessary fuel consumption is the only thing that'll delay any potential exhaustion of supply and the economic catastrophe that'll drive (soon followed by a real one, if we can't ship around critical goods).
There's very little else we can do directly / tactically.

Strategically the world economy and the tech base we rely on, needs oil and oil products until we substitute alternatives. Even EV's need plastics... but yes their uptick reduces our demand for petrol and diesel and 'every little bit helps'.

So we should be investing in all the things that reduce our dependence on foreign supply chains that're at-risk from measures well beyond our control.
This is a generically true statement and also helps explain why NZ has to continue to play on the world stage - because we can reduce, perhaps, but we can't eliminate.
So we can't hide under a rock, but we need to make smart plays of our own.

In my own little corner of the world, all I can say is - at least I replaced my ICE with a Hybrid, and I can use public transport for (most of) my commute, and I can leverage my hybrid drivetrain to get the most efficiency out of the battery element as possible. Frivolous driving went away a long time ago (Children cost money, who knew?), and I don't have anything that I do recreationally that directly consumes petrol or diesel in any volume[1]... so... aside from my own small commitment to helping reduce NZ's demand for oil-derived fuels, I still have a life to life and a family to support/enable, until such time I can't. Shrug.

[1] I volunteer in the emergency services context, which requires a bit of driving. Again, can only do that until I can't!

No signature to see here, move along...

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PolicyGuy

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#3475170 29-Mar-2026 18:00

Handle9:

Reducing the price of fuel in a supply crisis is absolutely the wrong move. It breaks the supply and demand relationship.

You can't subsidise your way out of a supply shortage.

True, but the government has been all over the media telling us not to panic, everything is fine, there's no shortage, "trust us we know what we're doing".
Hmmm

On the other had, the government is taking a huge unplanned bonus windfall from vastly increased GST take, particularly on diesel.
I think it would be fair to reduce the excise on diesel & maybe petrol so that the nett of (fuel excise + GST) provides much less of a windfall. Just to make the numbers clear, if diesel was $1.50 there was 19.6 cents/litre of GST in there: at $3.00, it's 39.1 cents/litre, so the government could afford to reduce the excise by at least 10 c/litre whilst still taking some extra margin. Maybe the figures and the excise could be adjusted monthly.
If the government was even a little bit transparent on this, it would probably do wonders for their approval ratings, as otherwise it is it's eventually going to seep into the mass & social media that the government is ripping us off my pocketing great wads of extra GST.

deepred

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#3475171 29-Mar-2026 18:04

BlakJak:

You can't subsidise your way out of a supply shortage - true.

But keeping a bit of an eye on the rest of the economy is also called for. The knock-on effects of fuel costs skyrocketing are negative to the economy-at-large as people will have less money to invest in anything/everything else, and the possibility of actually running out of diesel and wrecking the national distribution network for goods is catestrophic.

Only the government can (could) have smoothed out the fuel supply situation by building (or rebuilding) strategic reserves that could have reduced the immediate impact (note: still not a long term fix if supply can't keep up with demand; price increases are a valid way to reduce demand as well noting the side-effects above). But failing that, we are where we are.

Reducing unnecessary fuel consumption is the only thing that'll delay any potential exhaustion of supply and the economic catastrophe that'll drive (soon followed by a real one, if we can't ship around critical goods).
There's very little else we can do directly / tactically.

Strategically the world economy and the tech base we rely on, needs oil and oil products until we substitute alternatives. Even EV's need plastics... but yes their uptick reduces our demand for petrol and diesel and 'every little bit helps'.

So we should be investing in all the things that reduce our dependence on foreign supply chains that're at-risk from measures well beyond our control.
This is a generically true statement and also helps explain why NZ has to continue to play on the world stage - because we can reduce, perhaps, but we can't eliminate.
So we can't hide under a rock, but we need to make smart plays of our own.

In my own little corner of the world, all I can say is - at least I replaced my ICE with a Hybrid, and I can use public transport for (most of) my commute, and I can leverage my hybrid drivetrain to get the most efficiency out of the battery element as possible. Frivolous driving went away a long time ago (Children cost money, who knew?), and I don't have anything that I do recreationally that directly consumes petrol or diesel in any volume[1]... so... aside from my own small commitment to helping reduce NZ's demand for oil-derived fuels, I still have a life to life and a family to support/enable, until such time I can't. Shrug.

[1] I volunteer in the emergency services context, which requires a bit of driving. Again, can only do that until I can't!

Globally, NZ can't do much, except to politely ask Singapore & South Korea to actively seek alternative oil sources such as Canada & Brunei. Locally, hybridisation is the perfect step for those who can't afford EVs or otherwise find one that does the job.

Handle9

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#3475217 29-Mar-2026 18:09

PolicyGuy:

Handle9:

Reducing the price of fuel in a supply crisis is absolutely the wrong move. It breaks the supply and demand relationship.

You can't subsidise your way out of a supply shortage.

True, but the government has been all over the media telling us not to panic, everything is fine, there's no shortage, "trust us we know what we're doing".
Hmmm

On the other had, the government is taking a huge unplanned bonus windfall from vastly increased GST take, particularly on diesel.
I think it would be fair to reduce the excise on diesel & maybe petrol so that the nett of (fuel excise + GST) provides much less of a windfall. Just to make the numbers clear, if diesel was $1.50 there was 19.6 cents/litre of GST in there: at $3.00, it's 39.1 cents/litre, so the government could afford to reduce the excise by at least 10 c/litre whilst still taking some extra margin. Maybe the figures and the excise could be adjusted monthly.
If the government was even a little bit transparent on this, it would probably do wonders for their approval ratings, as otherwise it is it's eventually going to seep into the mass & social media that the government is ripping us off my pocketing great wads of extra GST.

If you reduce the price you will just encourage more consumption. The price isn’t artificially high, it’s high because of a market shortage.

Equally while you can say the government is making extra gst on fuel it’ll have a significant shortage in other tax take due to the impact of fuel prices. Should the raise gst monthly on everything else to compensate?

It’s a crap situation and it’s about least bad options not good ones.

HarmLessSolutions

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#3475218 29-Mar-2026 18:12

deepred:

Globally, NZ can't do much, except to politely ask Singapore & South Korea to actively seek alternative oil sources such as Canada & Brunei. Locally, hybridisation is the perfect step for those who can't afford EVs or otherwise find one that does the job.

All well and good but alternative crude oil supplies will still have prices dictated by international markets so while this might address the security of supply aspect it won't mitigate prices at the pumps.

https://www.harmlesssolutions.co.nz/

johno1234

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#3475219 29-Mar-2026 18:14

PolicyGuy:

On the other had, the government is taking a huge unplanned bonus windfall from vastly increased GST take, particularly on diesel.

The counter argument to that is that the public spend is inelastic. If the average live by the pay-check kiwi has to spend an extra $100 on diesel they will have to spend $100 less elsewhere. The gross turnover of the economy is not going to expand.

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johno1234

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#3475221 29-Mar-2026 18:17

Handle9:

If you reduce the price you will just encourage more consumption. The price isn’t artificially high, it’s high because of a market shortage.

Equally while you can say the government is making extra gst on fuel it’ll have a significant shortage in other tax take due to the impact of fuel prices. Should the raise gst monthly on everything else to compensate?

It’s a crap situation and it’s about least bad options not good ones.

100% correct on all points. Everybody is saying we need to reduce usage. Well, price signals are achieving exactly that - public transport utilisation has jumped, people are buying EVs and working from home.

gzt

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#3475241 29-Mar-2026 19:36

mattwnz: Reducing tax isn’t subsidising it, as they are making a huge windfall due to the extra tax they are collecting from GST. But I can’t see how it makes things worse as we don’t have a shortage at the moment. The problem is if we actually cut back at the moment, we don’t have the storage capacity for that fuel to be stored.

I'm guessing there are a variety of strategies available in the unlikely case storage is a problem. Pay the ship to hang around longer, sell to a return port, see it coming and price adjust for more demand, etc. Imo that's a good problem to have and relatively easy to resolve in the current circumstances.

gzt

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#3475243 29-Mar-2026 19:40

"Here's why some people may have to pay back fuel support"

https://www.rnz.co.nz/news/business/590640/here-s-why-some-people-may-have-to-pay-back-fuel-support

RNZ sounds the obvious warning. I have not heard the minister mention this. Imo it's sensible warning to give. IRD probably won't be too evil about it but that kind of thing is always painful if it's not expected.

cddt

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#3475346 30-Mar-2026 06:34

johno1234:

100% correct on all points. Everybody is saying we need to reduce usage. Well, price signals are achieving exactly that - public transport utilisation has jumped, people are buying EVs and working from home.

I know of at least one company which has decided they want office staff to continue working from the office, rather than allow them to WFH, so is going to start paying all staff a fuel allowance.

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