Fern Energy’s Marketing & Communications Manager, Andrew Trevelyan, provided FCANZ with this insight into the current state of New Zealand’s fuel supply and pricing.
Supply
It’s been well documented that New Zealand has enough fuel either landed here or on the water for it’s short-medium term needs.
The key issue is that sales have been well up at the pump since the war broke out.
Fuel importers responded to that increased demand by cutting allocations to rural fuel distributors like Fern at most of the 11 ports where fuel is unloaded. So those reduced allocations have affected our bulk deliveries in some parts of the country, particularly Hawkes Bay and much of the South Island.
We are now obtaining increased allocations at most ports and across the country our drivers are driving close to their maximum permissable hours catching up on deliveries to farms and agribusinesses.
Most of FCANZ members probably fuel up at the pump. They will have noticed some service stations temporarily running dry because of increased demand. We have a small retail network, and sales there have been up more than 50% since the war broke out.
This is ‘artificial demand’ – most people aren’t using more of this higher-priced fuel – they have purchased more than usual out of concerns about possible future supply or price issues.
People need to understand that, for the foreseeable future, we have enough fuel. Nobody can make long-term predictions at the moment, given the uncertainties around this war. (It will be interesting to see what Trump has to say this afternoon.)
Price
This is going to be the bigger issue for our country going forward, given how dependent our economy is on diesel.
We understand that the current price of diesel is a real pain point for almost all customers’ operations.
The reality is that as long as this conflict endures, and particularly as long as ship movements are blocked or restricted at the Strait of Hormuz, the certainties of supply and demand will mean pressure on the price of crude, which is fundamental to the price of refined petrol and diesel.
That’s not what people want to hear but we have to be realistic.
For More
For more detail on the supply and price issues, Federated Farmers recorded a podcast with Fern Chief Executive, Chris Gourley, on 1st April. Listen here
