John MacDonald: Don't ignore the Singapore PM's fuel warning

If you woke up this morning hoping things had somehow sorted themselves out in the Strait of Hormuz, sorry to disappoint. 

It’s still the cluster it was yesterday. In fact, worse, actually. With hostilities ramping up overnight. 

Which will probably have Singapore's Prime Minister saying “told you so” to anyone who poo-pooed the comments he made after meeting with Christopher Luxon yesterday, that he doesn’t see things getting any better on the fuel front for another six months. Maybe longer. 

Which tells me one thing: we need to do more to prepare for that here. In my mind, there is one thing The Government should be doing. Which I'll get to.  

So, Christopher Luxon has been in Singapore with the finance minister and the trade minister and a delegation of business leaders for the signing of a new trade deal. But, in light of what’s happening in the middle east, they also confirmed the fuel for food deal that’s been tacked on to the trade agreement. 

They came up with that after the war in Iran started impacting oil prices. Which pretty much says we’ll keep sending food products to Singapore, even when things get ropey - as they are at the moment. 

And, in exchange for that, Singapore will keep sending us refined fuel. 

It was after doing the paperwork and signing on the dotted line when Lawrence Wong, the prime minister of Singapore, said he sees shipping disruptions in the Strait of Hormuz extending into next year. 

He says infrastructure in the Middle East has been destroyed and shipping operators will want to know they’re not going to be attacked before they send their crews through. 

Not to mention the insurance issues shipping companies must be dealing with in that part of the world. 

Quite rightly, Lawrence Wong says that won’t happen overnight, and he thinks the disruptions to fuel shipments will continue for at least another six months. Potentially longer.  

Which means one thing: higher prices are here to stay. 

And, as we’ve found out over the last few weeks, it’s not just fuel that’s affected. There’s fertiliser. There’s plastics. Medicines. 

Which is why I think Christopher Luxon and Finance Minister Nicola Willis need to spend the time on the flight home from Singapore drafting a recommendation to cabinet to ramp things up. 

Because they need to listen to what Singapore's PM is saying and act on it. 

And, in my mind, that has to be relief for major diesel users. 

Yes, I know diesel prices have been down again. But, if we’ve learned anything from the past couple of months, it’s that when oil prices go up, diesel users are impacted way more than petrol users. 

And that’s why we need to listen to what Singapore's Prime Minister is saying and prepare for another six months or more of this. 

And we should be getting ourselves ready to subsidise major diesel users.  

I’m talking here about manufacturers and distributors of essential food products. 

It wouldn’t have to kick in straight away. The Government could say that, as soon as diesel prices go higher than petrol, subsidies will kick-in for the big food producers and trucking companies. 

Because the price of diesel affects all of us. The higher the price of diesel, the more we’ll end up paying at the supermarket. 

And, if the government is serious about trying to keep some sort of lid on the cost of living, this is the way to do it. 

If the Prime Minister of Singapore, where we get 30 percent of our refined fuel from, thinks this is going to go on for another six months, we need to be ready for when the price of diesel goes through the roof again. 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Mornings podcast with John McDonald
from News talks'b.

Speaker 2 (00:13):
If you wake up this morning hoping things had somehow
sorted themselves out in the Strait of for Moose, sorry
to disappoints. Still the cluster it was yesterday. In fact
it's worse actually, with hostilities ramping up overnight, which will
probably have Singapore's Prime Minister saying told you so. I
told you so to anyone who pooh pooed his comments

(00:36):
he made after meeting with Christopher luxeeny es today that
he doesn't see things getting any better on the fuel front.
Guess for how long? For another six months, maybe longer.
He's talking about this dragon on into next year, which
tells me one thing we need to do more to
prepare for that here and in my mind there is

(00:56):
one one thing the government should be doing. I'll tell
you what it is in a second. So Christopher Luxeni's
been in Singapore with the Finance Minister and the Trade
Minister and adelation of business leaders. This is all for
the signing of a new trade deal, but in light
of what's happening in the Middle East, they also confirmed
this fuel for food deal that's been tacked on to

(01:17):
the trade agreement they came up with that after the
war in Iran started impacting oil prices, which pretty much
says we'll keep sending food products to Singapore even when
things get ropey as they are at the moment, and
in exchange for that, Singapore will keep sending US refined fuel.
Just as a note, by the way, we get about
a third of our fuel, our refined fuel from Singapore.

(01:41):
And it was after doing the paperwork and signing on
the dotted line when Lawrence warm the Prime Minister of Singapore,
said that he sees shipping disruptions in Australia for moves
extending into next year. He says infrastructure in the Middle
East has been destroyed, and he says shipping operators, and
this is true, they're going to want to know that

(02:02):
they're not going to be attacked before they send their
crews through. Not to mention the insurance issues, imagine that.
Imagine the insurance issues shimping companies, shipping companies must be
dealing with in that part of the world. And quite rightly,
Lawrence Wong says all of those things they're not going
to be fixed overnight, and he thinks the disruptions to

(02:23):
fuel shipments will continue for at least another six months,
potentially longer, which means one thing, doesn't it fuel prices.
High fuel prices here to stay up, down, up, down,
And as we've found out over the last few weeks,
it's not just fuel that's affected. This fertilizer, this plastic medicines.
Thank you, Donald Trump. Brilliant. And this is why I

(02:48):
think when Christopher Luxen and Finance Minister Nichola Willis when
they get on the plane tonight, they need to spend
some time on the flight home drafting a recommendation to
cabinet to ramp things up, because they look, I'm in
no doubt they need to listen to what Singapore's Prime
minister are saying. They need to listen to it, and
they need to act on it. And in my mind,

(03:09):
that has to be relief for major diesel users. Now,
before you start yelling and telling me, oh, look, the
diesel prices are down again. Now, I know that. I
know that I've been on gasby this morning, I can
see that. But if we've learned anything from the past
couple of months, it's that when oil prices go up,
we know they'll go up again, and we've seen when

(03:30):
oil prices go up, diesel users are impacted way more
than petrol users. And that is why we need to
listen to what Singapore's Prime Minister is saying, and we
need to prepare for another six months or more of this,
and we should be getting ourselves ready to subsidize major
diesel uses. So I'm talking here about manufacturers essentially manufacturers

(03:54):
and distributors of essential food products. And it wouldn't have
to kick them straight away. Now. The government could say
as soon as diesel prices go higher than petrol, you know,
for example, they could says gets higher than petrol, subsidies
will kick in for the big food producers and the
tracking companies. Because the price of diesel, if you haven't

(04:16):
noticed it, it affects all of us, irrespective of the
vehicle you drive. The higher the price of diesel, the
more we'll end up paying at the supermarket. And if
the government is serious about trying to keep some sort
of lid on the cost of living, this is the
way to do it. Because of the Prime Minister of Singapore,
where we get thirty percent of our refined fuel from

(04:37):
If he thinks this is going to go on for
another six months, maybe even into next year, then we
have to make sure we're ready for when the price
of diesel goes through the roof again, because it will.
Do you agree with me or not? Is it time
to ramp things up?

Speaker 1 (04:55):
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