Photo source: The Australian
New Zealand is currently facing important challenges regarding its fuel security, particularly as it transitions to an import-only model following the closure of the Marsden Point oil refinery.
This transition has raised concerns about the country’s vulnerability to international supply chain disruptions. In response, both the government and major fuel suppliers like Z Energy are taking proactive measures to enhance resilience and ensure a reliable fuel supply.
Fuel Security in New Zealand
New Zealand relies heavily on imported fuels, making it particularly susceptible to global market fluctuations and geopolitical tensions. The recent study commissioned by the Ministry of Business, Innovation and Employment (MBIE) aims to evaluate the state of fuel security in the country, including examining the potential reopening of the Marsden Point refinery. This facility was mothballed in 2022, leading to increased reliance on imported refined fuels, which poses risks during international crises.
Moreover, the government’s initiative includes a minimum stockholding obligation that will require fuel importers to maintain reserves sufficient for 28 days of petrol, 24 days of jet fuel, and 21 days of diesel starting January 2025. This regulation is designed to mitigate the impacts of potential supply disruptions and ensure that essential services remain operational during crises.
Z Energy’s Analysis and Recommendations
Z Energy, one of New Zealand’s largest fuel suppliers, has conducted its own analysis regarding the security of fuel supplies in light of these changes. The company argues that while the transition to an import-only model presents challenges, it also offers opportunities for increased flexibility and reliability in fuel supply.
Z Energy operates over 50% of New Zealand’s bulk fuel storage terminals, which positions it strategically to manage supply effectively.
To further enhance fuel security, Z Energy has proposed several measures:
- Supporting Local Biofuels Production: Encouraging domestic biofuel manufacturing could reduce reliance on imports and bolster energy security.
- Establishing a National Stockpile: Creating a strategic reserve of fuels would provide an additional layer of protection against supply disruptions.
- Crisis Management Exercises: Regular drills could prepare stakeholders for potential emergencies related to fuel supply.
Govt Initiatives for Strengthening Resilience
The New Zealand government is actively working to improve fuel resilience through various initiatives. The ongoing fuel security study will assess vulnerabilities in the current supply chain and explore options for improving domestic production capabilities. The study will also engage with stakeholders across the fuel supply chain to develop a robust plan for future resilience.
In addition to regulatory measures, there are discussions about increasing diesel reserves specifically to support essential services and goods transportation during disruptions. This focus on diesel resilience is crucial given its role in various sectors, including emergency services and logistics.
The findings from the ongoing studies and analyses will play a pivotal role in shaping a secure and resilient fuel future for the country.