Taranaki drivers will soon face unprecedented prices at the pump, with Westpac chief economist Kelly Eckhold predicting the cost of 91 octane petrol will reach an average of $3.70 per litre by this weekend.
Global oil markets are experiencing massive disruptions following the effective closure of the Strait of Hormuz. The resulting supply shock has already pushed the national average for 91 past $3.40 a litre.
Speaking to RNZ's Morning Report, Eckhold said New Zealand is highly vulnerable to international shipping delays.
"New Zealand is at the long end, at the end of a very long supply chain, and basically mid-April is looking like when it lines up for when there will be challenges here," Eckhold said.
He urged the Government to begin prioritising diesel allocation immediately.
"Diesel that we burn now could be diesel that we need in three or four weeks," he said.
"You can get on the bus, you can drive your EV to work, but in the end, if we want a farmer to be getting our food off the land, then he needs that diesel."
This presents a threat to the Taranaki economy, with dairy farmers and freight operators relying heavily on steady diesel supplies. Commuters will also feel the financial sting of soaring petrol costs.
The situation has sparked frustration from local leadership. In an interview with RNZ, NPDC Mayor Max Brough questioned the current reliance on imported fuel.
"Why a country like this can't refine its own oil rather than rely on other countries' third parties to have done is really beyond me," Brough said.
Despite mounting concerns from economists and local officials, Prime Minister Christopher Luxon maintains the country has adequate fuel reserves.
He told Morning Report that officials are in constant contact with fuel importers.
He also urged the public to avoid panic buying.
"Keep working, keep the kids in school, doing all that stuff," Luxon said. "Please don't think it's Covid 2.0, I'm making sourdough at home again."
Supply chain data from US investment bank JP Morgan indicates the last scheduled shipments of fuel from Gulf Oil should arrive in New Zealand around April 20.
