The Government has extended an agreement for a 550,000-barrel strategic diesel reserve until August 2027 to maintain New Zealand’s fuel resilience.
Finance Minister Nicola Willis said maintaining national fuel security, particularly amid global uncertainty, remains a top priority for the Government and was pleased to announce this extension to the existing deal with Z Energy for the diesel reserve at Marsden Point.
“We explored all options available to us and considered advice from officials before making this decision. It offers continued fuel resilience and serves the best interests of New Zealanders, especially in light of the current volatility in the international markets," she said.
At the same time, Associate Energy Minister Shane Jones said fuel supplies remain consistent, but the extension to the agreement ensures domestic fuel resilience and protects against potential disruption to diesel supply.
“Diesel remains critical to New Zealand’s economy, from farms growing our food to trucks moving goods around our country. Our strategic diesel reserve provides confidence that we can keep key industries and services moving in the face of a threat to our fuel security," said Jones.
The Government continues to monitor the impacts of the Middle East conflict closely and has a plan to respond appropriately if the global situation changes.
“This year, we have shown how seriously we take New Zealand’s energy resilience and have taken steps in several policy areas to shore up our fuel supplies, working closely with the fuel industry throughout,” added Willis.
The diesel will continue to be stored in tanks at Marsden Point, refurbished with NZD 21.6 million from the Regional Infrastructure Fund. The storage allows for around 90 million litres of fuel, equivalent to roughly nine days of typical national consumption.
Z Energy will continue to own and manage the diesel volume under the agreement, while the Crown will control its release into the New Zealand market. The deal will run until the 1st of August 2027.
If the diesel is unused by the end of the contract, it would progressively transition into Z Energy’s business-as-usual stocks through to November.
The agreement limits the Crown’s exposure to any long-term fall in fuel prices.
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