The Government’s unprecedented contract with Z Energy for close to 90 million additional litres of diesel, equivalent to around nine days’ supply, has been signed.
Finance Minister Nicola Willis said that two weeks ago, the Government announced that it was in negotiations to firm up New Zealand’s fuel resilience by securing additional supply through an agreement with Z Energy.
"We are pleased to announce that this deal has now been finalised," she said.
"We have now placed an order for the fuel and expect the diesel will be in the refurbished tanks at Marsden Point as early as the end of June."
Willis added that channel infrastructure was working at pace to get the tanks ready to store the additional diesel, with the project due to be completed in the coming weeks.
This is an ambitious project that will help strengthen New Zealand’s fuel storage capacity, providing a valuable contribution to our short-term supply needs.
Associate Energy Minister Shane Jones mentioned that the Government has taken New Zealand’s fuel security seriously and is willing to invest where it counts, with this agreement being the first of its kind here. It will also continue to closely monitor the impacts of the conflict in the Middle East and assess whether any further action is needed to secure additional fuel supplies.
“While our fuel system is built to manage uncertainty, and we have already taken significant steps to strengthen our fuel security, New Zealand is exposed to international supply chains. The conflict in the Middle East has reinforced the importance of building strategic resilience," said Jones.
“Working with industry to establish reserve fuel supplies and increase our fuel storage capacity is exactly the kind of action we need to be taking right now to give ourselves the insurance we need.”
The agreement limits the Crown’s exposure to any long-term fall in fuel prices. Z Energy will procure, own and manage the volume of diesel under the agreement, while the Crown will control its release into the market.
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