Government agency could set petrol prices
New rules giving the Commerce Commission power to step in if fuel prices are too high are on the way, the Government says, along with a one-year delay to the addition of biofuels to fuel in an attempt to keep prices down.
Energy and Resources Minister Megan Woods yesterday also announced new onshore requirements to ensure New Zealand has sufficient fuel stocks in the event of major international oil and fuel market disruption, natural disasters and infrastructure failures.
The Government is ensuring New Zealand has supplies to last for at least 28 days for petrol, 24 days for jet fuel and 21 days for diesel.
It will also buy an extra seven days worth of cover for diesel to ensure the running of emergency services and food and essential goods deliveries.
It comes after the Marsden Pt oil refinery closure. However, the time frame of onshore stock is not likely to be in place until 2024.
‘‘These improvements will pave the way for a more stable, low-emissions fuel supply, greater choices for consumers, and a more competitive wholesale fuel market with the power for the Commerce Commission to regulate prices, if required,’’ Woods said.
Giving the commission power to step in and set fair prices if needed was intended to encourage more competitive wholesale pricing.
It would take almost a year for the commission’s power to take effect.
‘‘This is a new power. This is something that hasn’t existed and certainly will be a key lever to protect consumers,’’ Woods said.
The new backstop measures, which are expected to be introduced mid-next year, would allow for terminal-gate prices of one or more wholesale suppliers to be price regulated if excessive terminal-gate prices were found to be offered.
In efforts to reduce any extra potential costs to consumers, the Government has pushed the start date out for the Sustainable Biofuels Obligation, which requires fuel wholesalers to put biofuels into their fuel supply, from April 1 next year to 2024.
Woods said the international impacts on diesel was the main reason the sector was not ready.
‘‘It’s also reducing any extra potential costs consumers could face. While biofuels will account for a very small part of the overall fuel price, we recognise that motorists don’t need any extra costs in the current cost of living crisis,’’ she said.
The addition of biofuels was estimated to prevent 1 million tonnes of emissions over the first two years, going up to 9 million tonnes by 2035.
Fuel wholesalers will need to meet emission-intensity reduction targets of 2.4% for 2024 and 3.5% for 2025.
National Party leader Christopher Luxon said he did not want motorists being ripped off.
‘‘By all means, it’s important that we have . . . information disclosure, and we want to monitor pricing actions and competitive activity,’’ he said.
‘‘But really, the Government’s got to stop blaming a whole bunch of other people other than itself for not having a proper economic plan to deal with inflation.
‘‘With respect to biofuels – [I’m a] big, big fan of biofuels, but obviously by the time we’re putting on mandates and adding costs at this time, it’s not going to fly.’’