Emergency fuel stock law change introduced to Parliament

A proposed law that would create an emergency supply of petrol, diesel and jet fuel in New Zealand was introduced into Parliament on Thursday.

The bill, known as Improving Fuel Resilience Amendment bill, would create “an obligation for fuel companies to store a minimum amount of fuel onshore that can be drawn on in an emergency”, Energy and Resources Minister Megan Woods said.

“Although the risk of such a disruption is very low, it could cost the economy hundreds of millions to billions of dollars,” she said

The fuel stock plan came after the Marsden Point oil refinery closure.

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In March and December last year, jet fuel arriving in the country tested off-spec, which meant fuel companies and airlines had to put in place contingency arrangements to minimise disruptions.

Z said in December the fuel was rejected because it had an increased level of conductivity.

“Having more stocks at strategic locations like Auckland Airport will reduce the risk of such incidents happening again,” Woods said.

It would apply to BP, Gull, Mobil, Tasman Fuels and Z Energy that have fuel storage facility access.

”The combined minimum stockholding levels would equate to 28 days use of petrol, 24 days of jet fuel, and 21 days of diesel on average every month,” Woods said.

The government was also planning to buy and store about a week’s worth of diesel stocks for running emergency services and food transport.

Once passed, the changes would likely come into force from April next year.

Wood announced a suite of changes for the fuel industry last year, which included moves to give the Commerce Commission more power to step in and set fair prices if needed.