Luxon, who repeatedly referenced New Zealand\u2019s lack of control over the war\u2019s trajectory, said the uncertainty surrounding the war\u2019s longevity meant the Government had to prepare. <\/p>\n
\u201cWe are preparing for the worst-case scenario.\u201d<\/p>\n
Christopher Luxon and Nicola Willis speak to media at a press conference regarding the Government’s response to the conflict in the Middle East and its effects on New Zealand’s fuel stocks and the wider economy. Photo \/ Mark Mitchell<\/p>\n
Willis, who led the Government\u2019s ministerial group assessing the conflict\u2019s consequences for New Zealand, outlined a three-pronged approach which included considering \u201cdomestic prioritisation measures\u201d. <\/p>\n
Without speculating on what measures could be employed, Willis said she would be engaging with fuel companies to explore options and would provide an update next week when she would also expand on what would require New Zealand moving up from Level 1 in its fuel emergency level system. <\/p>\n
New Zealand\u2019s National Fuel Plan contained possible options, such as designated fuel retail outlets for \u201ccritical\u201d customers, designated lanes at stations or mini-tankers on site, which was described under emergency Level 2. <\/p>\n
Under Level 3, options include restricting opening hours for fuel retailers, setting maximum purchase limits and restricting sales in containers to limit hoarding. <\/p>\n
The Government\u2019s current position was any rationing or prioritisation measures were not necessary as the country had enough fuel either in storage or being shipped, totalling about seven weeks\u2019 worth of petrol, diesel and jet fuel. <\/p>\n
Christopher Luxon and Nicola Willis are preparing New Zealand for the “worst-case scenario” as the war in the Middle East continues. Photo \/ Mark Mitchell<\/p>\n
Luxon was quick to express his belief New Zealanders had thus far been well-behaved in their fuel consumption. Willis added she had seen reports of increased public transport usage, carpooling and employers letting employees work from home. <\/p>\n
The pair reinforced the Government\u2019s limited power to control the price of fuel and any financial support would be directed to people who were most in need, Willis identifying people who had to drive to work. <\/p>\n
While Cabinet was yet to decide on the level of support and how it would be administered, Willis said she had directed Inland Revenue and the Treasury to provide options. She confirmed she was aiming to assist families \u201cdirectly\u201d through measures in the \u201ctax and transfer system\u201d.<\/p>\n
She was cautious when asked whether support would extend beyond low-income households, saying it would be \u201cirresponsible\u201d to provide support too widely, fearing it would create a \u201cvicious spiral\u201d of inflation and price surges. <\/p>\n
On Monday, Willis said she had sought advice on how high fuel prices could go. <\/p>\n
Today, she accepted there were \u201ca lot of predictions\u201d and summarised her advice as \u201chow long is a piece of string\u201d, noting price increases would depend on the continued closure of the Strait, how difficult access to crude oil became and the extent of damage to exploration fields.<\/p>\n
Little, in his speech, offered a \u201crule of thumb\u201d for thinking about how fuel prices affect prices. <\/p>\n
\u201cA rule of thumb is that every US$10 increase per barrel of oil roughly translates to 10 cents a litre extra for New Zealanders at the petrol pump. Therefore, prices at around US$100 a barrel mean a 40 cents a litre increase in New Zealand,\u201d he said.<\/p>\n
Despite the uncertainty, Willis remained confident New Zealand\u2019s economy would continue to grow this year but said the extent of that growth was becoming harder to predict. <\/p>\n