Kiwis feeling the pinch and its likely to be the new OIL normal
New Zealanders are feeling the pinch at the pump, with 91-octane petrol climbing from around $2.49 a litre just weeks ago to $2.94–$3.30+ at many stations - national average now $3.00–$3.10+. Diesel has risen even faster, from lower pre-crisis levels to $2.70–$2.90 up 90 cents in recent weeks.
Here’s how the crisis hits Kiwi wallets, why prices are surging (for both petrol and diesel), and realistic predictions ahead.
Why Gulf Oil Is Suddenly So Expensive to Move
The Strait of Hormuz is a two-way channel, but Iran’s selective restrictions and attacks mean many loaded tankers are stuck inside the Gulf - over 85 reported waiting, and new ones hesitate to enter.
Gulf producers use bypass pipelines — Saudi’s East-West to Yanbu (4–4.5 million bpd actual) and UAE’s to Fujairah (1.5–2 million bpd) but these cover only a fraction of normal exports. The rest reroute via the risky Red Sea or around the Cape of Good Hope, adding 10–20 days, extra fuel, war-risk insurance, and freight costs — all passed into crude prices for Asian refineries supplying NZ.
To put this into perspective – New Zealand uses about 160,000 bpd=barrels per day
For a relatable comparison Other Country Comparisons - Daily Oil Consumption in bpd, latest 2024–2026 estimates
Australia (whole country, pop. 27 million): 1.09–1.15 million bpd (e.g., 1,145,000 from Worldometers; 1,087,000 from CEIC). This is about 7–8 times NZ's level
Australia is NZ's closest neighbour and much larger in economy/population/land area.
United States: 19–20.5 million bpd (world #1, 19–20% of global total).
China: ~16–16.4 million bpd (world #2).
India: ~5.3–5.6 million bpd.
Japan: ~3.1–3.2 million bpd.
Singapore (city-state comparison): 1.48–1.51 million bpd, far higher than NZ despite similar population size, due to its role in global shipping/refining.
Iran’s “Security Fee” – An Extra Tax on Oil
Iran is charging informal passage fees (up to US$2 million per tanker via intermediaries) through “approved corridors.” Parliament is drafting laws for permanent transit tolls/taxes on oil, gas, shipping, or food imports using the strait.
However these are informal/Case-by-Case Fees: At least one tanker operator has reportedly paid around US$2 million to secure approval and safe transit via a "safe corridor" controlled by Iran's Islamic Revolutionary Guard Corps (IRGC). This involves intermediaries (often Iran-linked contacts abroad) negotiating with the IRGC, with payments potentially in USD cash, cryptocurrency, or even barter arrangements. Ships may transit with AIS (tracking) turned off and GPS jammed in a narrow channel past IRGC naval assets. This isn't a universal toll yet but a selective process for approved vessels (often those not aligned with the US/Israel).
Even if the war ends tomorrow, Iranian officials have made clear the strait “won’t return to pre-war status.” That fee is likely to become a permanent part of the cost structure for any Gulf crude that still uses the sea route.
The Russian Lifeline via India
Asian refineries (Singapore, South Korea, Japan) are switching to Russian crude refined in India (with U.S. waivers allowing purchases). This stable supply avoids Hormuz risks and prevents shortages, though Urals now trades near Brent levels after costs, helping cap spikes but not reversing them.
How Fuel Pricing Works in New Zealand
NZ imports finished refined fuels (petrol and diesel) from Asia since Marsden Point became an import terminal in 2022. Pump prices break down as 50–60% crude/refining/shipping/importer margins (the volatile part), with the rest fixed: excise duty 74c/L for both, GST 15%, ETS, ACC levies, and dealer margins.
Analyst rule of thumb: Every US$10/bbl Brent rise adds 15–20 NZc/L to petrol and 18–25 NZc/L to diesel (diesel often swings more due to freight/farming/industry demand).
Unoffical Price Predictions for NZ Pumps
Brent sits around US$106–112/bbl (up 40–50%+ since the war began), with rerouting and potential Iranian fees adding layers.
Petrol (91-octane) Short-term - next 2–6 weeks: National average likely $3.20–$3.60/L. Some regions/stations already touch $3.40–$3.50. Medium-term - through 2026, if fees persist: $3.80–$4.00/L as a realistic baseline.
Diesel - Diesel has risen faster so far due to freight/farming demand and refining dynamics. Current: National average $2.70–$2.90/L some $2.80–$3.00+.
Short-term (next 2–6 weeks): Likely $3.10–$3.40/L, with some stations/regions hitting $3.20–$3.50 sooner.
Medium-term (through 2026): $3.50–$3.80+/L baseline realistic, potentially outpacing petrol due to economic ripple effects (trucking/food costs). Diesel spikes matter more for inflation.
The Russian/Indian supply shift caps the worst but won’t return prices to pre-war levels. Gulf crude’s easy flow era is over for now.
What This Means for Kiwis
Higher petrol and diesel flow into groceries, freight, airfares, farming, and manufacturing. Government has cut excise temporarily and monitors stocks, but NZ can’t fully shield from this global shock.
De-escalation or more Russian supply could moderate rises; intensified strikes or formal fees could push higher ends.
Electric Vehicles: Limited Mitigation
NZ’s EV fleet offers some buffer for passenger travel but little for diesel-dependent sectors.
As of early March 2026, over 100,323 NZ- new BEVs + PHEVs are registered, 89,900 fully electric light vehicles + 44,300 PHEVs), 3% of the light fleet >4.4 million vehicles.
Electric buses scale up in cities Auckland pushing toward hundreds/low-emission majority. Electric heavy trucks remain niche e.g., WM NZ’s~60 for waste/food ops, with limited adoption for mainstream freight/food delivery due to battery costs, range, and charging infrastructure.
EVs cut some petrol/diesel use in urban/personal/public transport, but freight, farming, and long-haul still rely heavily on diesel — so higher diesel prices will still drive up food/transport costs. Long-term, more EVs/solar/grid upgrades could build resilience, but the current fleet is too small for major crisis offset.
Recent changes to vehicle registration (rego) fees and Road User Charges (RUC) have left New Zealand EV owners feeling penalised for switching to electric vehicles. Diesel and electric vehicles are grouped together at higher rates around $242 for 12 months, following the end of the EV-specific ACC levy discount in July 2025.
Battery electric vehicles (BEVs) now also pay full RUC at $76 per 1,000 km - the same as light diesels - after the previous exemption expired once EVs exceeded 2% of the fleet.
The government argues these shifts promote ‘fairness’ in funding road maintenance through the National Land Transport Fund, as EVs cause similar road wear, due to battery weight, but previously contributed nothing via fuel excise duty.
The scrapping of the Clean Car Discount in 2024 removed rebates that once made EVs more affordable. A major transition is underway: legislation expected in 2026 will lead to electronic RUC for all light vehicles (including petrol) by around 2027, based on distance and weight, meaning petrol drivers will eventually pay more per km as well. In the context of surging fuel prices from the Middle East crisis, these policies highlight New Zealand's ongoing challenge in balancing road funding equity, EV adoption, and resilience to imported oil shocks.
Buckle up – it’s going to get challenging out there as the fuel price ride continues.