Why the fuel crisis isn’t Covid and shouldn’t be treated the same

2026-03-27 - 04:13

Analysis: On its face, the fuel crisis may look a lot like the Covid-19 pandemic, but it is in truth a different beast. Yes, the Government announced a four-phase escalation plan on Friday. We’re now all looking at world maps, scouring them for tankers instead of virus cases. And the overriding sense of uncertainty, that we don’t know what tomorrow will look like but that we know there’s something big looming, is starkly familiar. In reality, however, we are poorly served by drawing direct comparisons to Covid-19. Fuel is different from a virus. Where an undetected cluster of cases could put New Zealand into lockdown in an instant during the pandemic, we won’t wake up tomorrow morning to find the diesel is all gone and we need to move to phase four of the fuel security plan. Indeed, Covid-19 primed us to assume any looming threat will be borne out. But just because there are four phases does not mean we will see them all. There’s a reasonable likelihood we may never even leave phase one. That’s not to say the worst couldn’t eventuate. It’s prudent to prepare for fuel supply disruption and explain to the public what the response would be were that to occur. Right now, however, our fuel supply has not been disrupted. The fuel crisis is today manifesting in price, not in supply. News headlines about individual petrol stations running out of fuel prompt the public to think the country is running out. Instead, the fuel distribution system is built for business-as-usual demand, but demand has been elevated in recent weeks, for understandable reasons. We have an expectation that prices still have some way to rise before they cap off. In response, people rush to fill their cars now in fear of what they’ll pay if they wait a week. At the same time, however, no one is driving around more than before. If anything, conscious of how much more expensive petrol and diesel is this week than last, we’re driving less. That’s what Finance Minister Nicola Willis indicated during her announcement on Friday, and which was backed up by calculations from the Ministry of Transport, provided to Newsroom. “For the week up to 25 March, MOT data suggests that NZ is slightly below the weekly average for petrol use in terms of Vehicle Kilometres Travelled (VKT), with diesel (VKT) and jet fuel consumption at near the same rate, compared with the first two weeks of February, which would be comparable to last year’s average weekly consumption,” Dan Jenkins, the ministry’s director of data improvement, said. Logically, that means demand at the pump should begin to tail off soon – and the fuel companies say that’s already happening. “What we’ve seen is a significant increase in demand and that’s at the retail level where it’s – I wouldn’t call it panic buying, it’s just in the face of increasing costs, customers are bringing their purchases forward. So that’s broadly 10 percent. And there’s growing data that the use of the fuel in vehicles on the road is declining, so what’s happening is we’re actually filling up petrol fuel tanks and they’re not being used,” Z Energy CEO Lindis Jones told Newsroom. Simon Parham, CEO of Waitomo Group, said: “What we are seeing, anecdotally, is we are at that sort of demand destruction stage where people are changing behaviours ... If you’ve got a full tank, it doesn’t mean you just go driving more. It just means you do the same stuff and you fill up a little bit later.” In other words, while we have for a few weeks been chewing through fuel stocks faster than usual, expect that to slow down. The Ministry of Business, Innovation and Employment publishes twice-weekly updates of how many days’ worth of fuel are in New Zealand or on the way. Armchair-epidemiologists-turned-armchair-fuel-importers looking to these figures – or any of a half-dozen, AI-coded dashboards that have cropped up in the past fortnight – have raised concerns that we seem to be using more than one day’s worth of fuel each day, but that is likely to change over the next week. The first hint of a real supply disruption won’t appear on the fuel stock dashboards. Instead, it would come far upstream in the supply chain, at the point where fuel departs refineries in South Korea, Singapore and Japan. For now, at least, that supply continues unabated. And while there are some worrying signs around export controls in some nations, we’re not hours or days away from running out.