SYDNEY: New Zealand is weighing options for storing fuel overseas in Malaysia, Singapore and South Korea if it decides to create a sovereign reserve, Resources Minister Shane Jones told AFP Friday (May 8).
Government officials were exploring where fuel could be stored internationally if New Zealand needed to build a physical, sovereign reserve as it navigated a "fuel quagmire", he said.
New Zealand last month signed a letter of intent to buy 90 million litres of diesel, or nine days of national supply, from Z Energy as a physical buffer.
"Over the last 10 days, it has become evident to the New Zealand government that there is not enough storage capacity to significantly increase that buffer in-nation," Jones said.
"Therefore, the officials are working and looking at options. If the New Zealand government is to increase the buffer, what is the quality of the option in the three countries where we draw our fuel from -- Malaysia, Singapore, and Korea."
New Zealand currently has financial options that give it the right to purchase fuel in Japan, the United States and other countries, the minister said.
"However, that is virtual fuel and as we make our way through this fuel quagmire we are trusting in the word and the integrity of the fuel import companies who have to meet minimum stock holding statutory obligations," Jones said.
"But there has been a clear call from New Zealand business to explore how we can boost the physical presence of fuel in New Zealand as a buffer beyond what the fuel companies are statutorily obliged to deliver to us week by week." - AFP
