The Government is actively monitoring the impact international fuel prices are having on the price we're being asked to pay at the pump.
Crude oil prices have topped $100 US dollars a barrel for the first time in three years - and our petrol prices surged another 14 cents in the weekend.
Finance Minister Nicola Willis says the Government's working with key industries to keep an eye on prices, in case there's a global shock.
"We can assure New Zealanders that there's enough fuel for at least 60 days, and then beyond that - of course, fuel companies will be responsible for having their own orders in."
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Speaker 1 (00:00):
Even in coming up in the next hour, Shane Soley
is going to talk us through the oil price and
the implications of the spike. A law lecturer on why
we need rules for asteroid mining. Yep, it's a real thing.
And Gavin Gray is with us out of the UK
at seven pass six and with us now as per
usual on a Monday. Nikola willis the Finance Minister. High Nicholer.
Good evening, Heather, how do you rate the possibility that
we will have to ration fuel?
Speaker 2 (00:22):
Well? At the stage we have good fuel security. We
have around twenty nine days worth a fuel stock in
the country and a similar amount on the water on
its way here, so there's no immediate threat to fuel security.
We've stood up our response group to that, so we're
working with industry to monitor that very closely. We're also
(00:44):
members of the International Energy Agency that if there were
to be a global shock to fuel security, has a
number of options without steps on to act.
Speaker 1 (00:54):
Okay, So, apart from apart from the fact that you
guys have the powers to ration fuel if necessary, what
else can you do?
Speaker 2 (01:00):
Well? Right now we can assure New Zealander is that
there's enough fuel for at least sixty days and then
beyond that, of course, fuel companies will be responsible for
having their own orders in and ensuring that that can
come to New Zealand. And we are members of the
International Energy Agency, which will have the options of increasing
(01:21):
supply tickets for future supply to come in, and of
course as part of our monitoring, there are always options
down the line if there's not abundant fuel in the world,
but we haven't given consideration to specific proposals there yet
because there's no need to at this stage.
Speaker 1 (01:39):
Okay, what I'm trying to get to is because I
asked Shane Jones a similar thing and didn't get an
adequate response. I mean, it sounds very cool that you
guys have set up a ministerial oversight group, but what
actually are you doing apart from just your jobs.
Speaker 2 (01:53):
Well, we have an incident management group at the Ministry
for Business and what they do is they work with
the fuel importation company needs that retailers, fuel users to
understand what the picture is looking like. So if they
were to say, look, we're actually having difficulties getting future
orders of fuel, we would have very advanced warning of
that and that would provide us time to respond.
Speaker 1 (02:14):
But isn't that basically just what happens with the energy
ministry anyway, Like you didn't have to set up this group,
this is just running a country.
Speaker 2 (02:21):
Well, the particular thing that happens is we work much
more closely with industry, fuel importers and retailers to be
getting real time information about what they're seeing happening in markets,
and then we engage with our international counterparts, so Australia,
the US and others, to understand what their likely responses
are to that. As you appreciate, they have options in
(02:42):
terms of OPEQ, in terms of which oil supplies they
release into the global market and how they ensure that
fuel is able to reach countries around the world, because
of course it's in everyone's interests that there aren't global
fuel shortages.
Speaker 1 (02:56):
Are you going to I've got a surprise. A number
of text of our surprised me at just how many
techs I'm getting raising concerns about how fast the oil companies,
that the petrol companies are moving to push up the price.
Are you monitoring what's going on there that they're not
just going to gouge us?
Speaker 2 (03:11):
Yes, we are, And overnight we've asked the commerce Commission
to step up it's monitoring of what's happening with fuel pricing.
Of course, we do expect there will be market movements
as those global prices increase, but this should not be
an opportunity for fuel companies to gouge or to make
unreasonable hikes in prices. So the Commerce Commission are watching
(03:34):
that carefully and they stand ready to act if we
do see perverse market behavior.
Speaker 1 (03:39):
Oka Now, have you actually decided that you will delay
the tax the tax increase on the fuel price for
next year or are you just considering this?
Speaker 2 (03:48):
Well, I've simply acknowledged that Cabinet has not yet considered
the legislation that would be required to affect that tax increase,
and when we do give consideration to that, you will
need to be mindful of market conditions at the time. So,
simply as part of being a responsible government, we would
have to look at, well, what's happening with petrol prices
(04:09):
across the economy and what does that mean. And I'm
just being an adult and saying the consequences of not
increasing petrol tax would be that there's less money available
to maintain the roads, to rebuild roads after major weather
events are less money available to build the new roads
that New Zealanders want to see. So we would have
(04:29):
to weigh that up at the time based on the
best information we have, and that's several months away that consideration.
Speaker 1 (04:35):
And is it a hard no to cutting the fuel
excise tax or just a no for now?
Speaker 2 (04:40):
It's not something we're considering at this time. I'm mindful
that petrol tax hasn't increased since twenty twenty and the
last government when it did affect what was meant to
be a short term reduction in the fuel price, ended
up extending that it came with a big cost around
a billion dollars. And again we're just being realistic about
(05:02):
the fact that that would have an impact both either
in terms of debt or it would have an impact
in terms of road maintenance. So we need to weigh
that up because short term gain could equal medium term pain.
And it is too early for us to have a
knee jerk reaction to what has been a considerable spike
(05:22):
in oil prices in recent days. We need to keep
monitoring the situation. We're not actively considering fuel subsidies at
this time.
Speaker 1 (05:31):
Have you got to the stage yet where you are
having to rethink anything in your budget, which is in
a couple of months.
Speaker 2 (05:37):
No. What I did get late last week was the
preliminary fiscal forecasts based on what we've seen since the
December update, and that was painting a much rosier picture
than I presented to you in December. What that showed
was that we were on track to have a better
operating valunary.
Speaker 1 (05:56):
I know, but what has happened in the run and
that's fine and I'm aware of that, But what has
happened in around has changed things potentially from here on.
And have you had any indication you may have to
rethink the budget? Was it too early?
Speaker 2 (06:06):
Well? I have absolutely had an indication that if this
crisis is prolonged and continues, and these very high oil
prices are sustained four months or even longer, that will
have an effect on inflation here at home.
Speaker 1 (06:20):
When do you have to mean, You've got two months
in the budgets happening, So when do you have to
start thinking about whether you rework the budget?
Speaker 2 (06:26):
Well? I get my final economic forecasts on the first
of April, so that's when I know what is the
outlock for the New Zealand economy, and there will be
time at that juncture to assess, for given that what
does that mean for the spending decisions that the government
makes for this year's budget. So there will be time
to react to that if need be.
Speaker 1 (06:45):
Okay, Nikola, why didn't you fully back Chris Luxon on Friday?
Speaker 2 (06:49):
I did?
Speaker 1 (06:49):
You didn't? You were asked, I had the right guy?
You were asked, is he the right guy? And you
didn't say yes?
Speaker 2 (06:56):
I said he had the backing of the National Party caucus.
Describe it, said yes?
Speaker 1 (07:02):
Do you want to try again there? Yes?
Speaker 2 (07:06):
And I heard you Fiscim the interview late last week,
and I thought, actually that you were being quite an
imaginary artist in terms of your reading between lines that
simply weren't things that I said. I was very clear
that not only does the Prime Minister have my backing,
he has the backing of our entire National Party caucus,
he has the backing of our government and he is
(07:27):
doing an excellent job. And to try and read anything
other than those precise statements into what I said, I
think is just mischief making. Well.
Speaker 1 (07:35):
I mean, I've been around long enough to know exactly
what you were doing by not answering that question directly.
Speaker 2 (07:41):
And I've been around long enough to see mischief making
by the media for many, many years. And as much
as you were accusing me of mischief, you were not
immune from it.
Speaker 1 (07:50):
Are you accusing me right now? How?
Speaker 2 (07:53):
Yes? Because I backed the Prime Minister. I am loyal
to the Prime Minister. And that's exactly what I laid
out on Friday.
Speaker 1 (08:00):
Is this coming up at caucus tomorrow?
Speaker 2 (08:03):
Well, we don't discuss what we discuss at caucus. Caucus
as a private meeting where we discuss upcoming policy, legislation
and other issues of the day.
Speaker 1 (08:11):
All right, nick Ella, thank you very much for the
time appreciated. It's called Nicola Willis Finance Minister. For more
from Hither Duplessy Allen Drive, listen live to news Talks
it'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
Even in coming up in the next hour, Shane Soley
is going to talk us through the oil price and
the implications of the spike. A law lecturer on why
we need rules for asteroid mining. Yep, it's a real thing.
And Gavin Gray is with us out of the UK
at seven pass six and with us now as per
usual on a Monday. Nikola willis the Finance Minister. High Nicholer.
Good evening, Heather, how do you rate the possibility that
we will have to ration fuel?
Speaker 2 (00:22):
Well? At the stage we have good fuel security. We
have around twenty nine days worth a fuel stock in
the country and a similar amount on the water on
its way here, so there's no immediate threat to fuel security.
We've stood up our response group to that, so we're
working with industry to monitor that very closely. We're also
(00:44):
members of the International Energy Agency that if there were
to be a global shock to fuel security, has a
number of options without steps on to act.
Speaker 1 (00:54):
Okay, So, apart from apart from the fact that you
guys have the powers to ration fuel if necessary, what
else can you do?
Speaker 2 (01:00):
Well? Right now we can assure New Zealander is that
there's enough fuel for at least sixty days and then
beyond that, of course, fuel companies will be responsible for
having their own orders in and ensuring that that can
come to New Zealand. And we are members of the
International Energy Agency, which will have the options of increasing
(01:21):
supply tickets for future supply to come in, and of
course as part of our monitoring, there are always options
down the line if there's not abundant fuel in the world,
but we haven't given consideration to specific proposals there yet
because there's no need to at this stage.
Speaker 1 (01:39):
Okay, what I'm trying to get to is because I
asked Shane Jones a similar thing and didn't get an
adequate response. I mean, it sounds very cool that you
guys have set up a ministerial oversight group, but what
actually are you doing apart from just your jobs.
Speaker 2 (01:53):
Well, we have an incident management group at the Ministry
for Business and what they do is they work with
the fuel importation company needs that retailers, fuel users to
understand what the picture is looking like. So if they
were to say, look, we're actually having difficulties getting future
orders of fuel, we would have very advanced warning of
that and that would provide us time to respond.
Speaker 1 (02:14):
But isn't that basically just what happens with the energy
ministry anyway, Like you didn't have to set up this group,
this is just running a country.
Speaker 2 (02:21):
Well, the particular thing that happens is we work much
more closely with industry, fuel importers and retailers to be
getting real time information about what they're seeing happening in markets,
and then we engage with our international counterparts, so Australia,
the US and others, to understand what their likely responses
are to that. As you appreciate, they have options in
(02:42):
terms of OPEQ, in terms of which oil supplies they
release into the global market and how they ensure that
fuel is able to reach countries around the world, because
of course it's in everyone's interests that there aren't global
fuel shortages.
Speaker 1 (02:56):
Are you going to I've got a surprise. A number
of text of our surprised me at just how many
techs I'm getting raising concerns about how fast the oil companies,
that the petrol companies are moving to push up the price.
Are you monitoring what's going on there that they're not
just going to gouge us?
Speaker 2 (03:11):
Yes, we are, And overnight we've asked the commerce Commission
to step up it's monitoring of what's happening with fuel pricing.
Of course, we do expect there will be market movements
as those global prices increase, but this should not be
an opportunity for fuel companies to gouge or to make
unreasonable hikes in prices. So the Commerce Commission are watching
(03:34):
that carefully and they stand ready to act if we
do see perverse market behavior.
Speaker 1 (03:39):
Oka Now, have you actually decided that you will delay
the tax the tax increase on the fuel price for
next year or are you just considering this?
Speaker 2 (03:48):
Well, I've simply acknowledged that Cabinet has not yet considered
the legislation that would be required to affect that tax increase,
and when we do give consideration to that, you will
need to be mindful of market conditions at the time. So,
simply as part of being a responsible government, we would
have to look at, well, what's happening with petrol prices
(04:09):
across the economy and what does that mean. And I'm
just being an adult and saying the consequences of not
increasing petrol tax would be that there's less money available
to maintain the roads, to rebuild roads after major weather
events are less money available to build the new roads
that New Zealanders want to see. So we would have
(04:29):
to weigh that up at the time based on the
best information we have, and that's several months away that consideration.
Speaker 1 (04:35):
And is it a hard no to cutting the fuel
excise tax or just a no for now?
Speaker 2 (04:40):
It's not something we're considering at this time. I'm mindful
that petrol tax hasn't increased since twenty twenty and the
last government when it did affect what was meant to
be a short term reduction in the fuel price, ended
up extending that it came with a big cost around
a billion dollars. And again we're just being realistic about
(05:02):
the fact that that would have an impact both either
in terms of debt or it would have an impact
in terms of road maintenance. So we need to weigh
that up because short term gain could equal medium term pain.
And it is too early for us to have a
knee jerk reaction to what has been a considerable spike
(05:22):
in oil prices in recent days. We need to keep
monitoring the situation. We're not actively considering fuel subsidies at
this time.
Speaker 1 (05:31):
Have you got to the stage yet where you are
having to rethink anything in your budget, which is in
a couple of months.
Speaker 2 (05:37):
No. What I did get late last week was the
preliminary fiscal forecasts based on what we've seen since the
December update, and that was painting a much rosier picture
than I presented to you in December. What that showed
was that we were on track to have a better
operating valunary.
Speaker 1 (05:56):
I know, but what has happened in the run and
that's fine and I'm aware of that, But what has
happened in around has changed things potentially from here on.
And have you had any indication you may have to
rethink the budget? Was it too early?
Speaker 2 (06:06):
Well? I have absolutely had an indication that if this
crisis is prolonged and continues, and these very high oil
prices are sustained four months or even longer, that will
have an effect on inflation here at home.
Speaker 1 (06:20):
When do you have to mean, You've got two months
in the budgets happening, So when do you have to
start thinking about whether you rework the budget?
Speaker 2 (06:26):
Well? I get my final economic forecasts on the first
of April, so that's when I know what is the
outlock for the New Zealand economy, and there will be
time at that juncture to assess, for given that what
does that mean for the spending decisions that the government
makes for this year's budget. So there will be time
to react to that if need be.
Speaker 1 (06:45):
Okay, Nikola, why didn't you fully back Chris Luxon on Friday?
Speaker 2 (06:49):
I did?
Speaker 1 (06:49):
You didn't? You were asked, I had the right guy?
You were asked, is he the right guy? And you
didn't say yes?
Speaker 2 (06:56):
I said he had the backing of the National Party caucus.
Describe it, said yes?
Speaker 1 (07:02):
Do you want to try again there? Yes?
Speaker 2 (07:06):
And I heard you Fiscim the interview late last week,
and I thought, actually that you were being quite an
imaginary artist in terms of your reading between lines that
simply weren't things that I said. I was very clear
that not only does the Prime Minister have my backing,
he has the backing of our entire National Party caucus,
he has the backing of our government and he is
(07:27):
doing an excellent job. And to try and read anything
other than those precise statements into what I said, I
think is just mischief making. Well.
Speaker 1 (07:35):
I mean, I've been around long enough to know exactly
what you were doing by not answering that question directly.
Speaker 2 (07:41):
And I've been around long enough to see mischief making
by the media for many, many years. And as much
as you were accusing me of mischief, you were not
immune from it.
Speaker 1 (07:50):
Are you accusing me right now? How?
Speaker 2 (07:53):
Yes? Because I backed the Prime Minister. I am loyal
to the Prime Minister. And that's exactly what I laid
out on Friday.
Speaker 1 (08:00):
Is this coming up at caucus tomorrow?
Speaker 2 (08:03):
Well, we don't discuss what we discuss at caucus. Caucus
as a private meeting where we discuss upcoming policy, legislation
and other issues of the day.
Speaker 1 (08:11):
All right, nick Ella, thank you very much for the
time appreciated. It's called Nicola Willis Finance Minister. For more
from Hither Duplessy Allen Drive, listen live to news Talks
it'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
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