Latest / Best of Business / Nathan Surendran: Wise Response Society chair on New Zealand's response to the ongoing fuel crisis

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Nathan Surendran: Wise Response Society chair on New Zealand's response to the ongoing fuel crisis · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk Z'B. Follow
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  Speaker 2: Just some experts have raised concerns that the government fuel
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  Speaker 2: response is not proactive enough. A month ago, the government
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  Speaker 2: detailed our response phases and what would trigger a move
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  Speaker 2: between phases. We currently remain in phase one, which means
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  Speaker 2: there are no fuel restrictions in place. To talk us
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  Speaker 2: through his thoughts on the current approach, engineering consultant and
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  Speaker 2: the chair of Wise Response Society, Nathan Surrendering is worth
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  Speaker 2: me now, good morning, Nathan Francesca. Okay, in your view,
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  Speaker 2: where are we in terms of meeting the criteria for
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  Speaker 2: moving phases?
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  Speaker 3: Yeah? Yeah, So the criteria are export restrictions that source
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  Speaker 3: refineries have been met, stock changes plus and minus three
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  Speaker 3: days since the last updates. You could say that's been
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  Speaker 3: met a couple of times over the last few weeks.
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  Speaker 3: Fuel companies cannot feel future orders not officially met. But
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  Speaker 3: there's certainly you know, talk of to rationing within the
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  Speaker 3: supply chain in New Zealand and allocations to specific sectors.
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  Speaker 3: The significant IEA or Australian policy change criteria has been
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  Speaker 3: met as well. So that's at least three, probably four
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  Speaker 3: of the criteria that have been met according to the
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  Speaker 3: government's own published wording.
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  Speaker 2: Okay, other countries like Australia have already made changes. Should
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  Speaker 2: we be comparing ourselves to them? Should we see more
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  Speaker 2: productive measures in place?
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  Speaker 4: I believe so, not just countries like Australia, but also
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  Speaker 4: our supply partners. Singapore and South Korea are both our
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  Speaker 4: major supply partners who we get over eighty percent of
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  Speaker 4: our refined product from, and they have all put in
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  Speaker 4: place changes and they're all in the process of, you know,
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  Speaker 4: signaling further changes as the situation continues to worsen.
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  Speaker 2: Unfortunately, So Nathan, it does more about incoming shipments more
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  Speaker 2: than the stock that we have in the country.
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  Speaker 4: I think it's really yeah. I mean, you know, the
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  Speaker 4: stock levels have remained reasonably consistent over the last few weeks.
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  Speaker 4: There's been up and and downwards movements. As you know,
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  Speaker 4: we've drawn down on fuel and it's been replenished. It's
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  Speaker 4: the forward environment and the global environment that I think
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  Speaker 4: we need to be paying attention to, because you know,
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  Speaker 4: supplies our tightening. As I say, we've been drawing down
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  Speaker 4: on reserves. That's both you know, the strategic reserves and
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  Speaker 4: also floating reserves oil and tankers that was already was
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  Speaker 4: already around the place, and so we're now in a
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  Speaker 4: situation where those margins are being eroded and the situation,
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  Speaker 4: the outlook from the analysts I'm looking at, is worsening
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  Speaker 4: by the day.
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  Speaker 2: Has the sea spire made a tangible difference though.
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  Speaker 4: No, not really. You know, there's a few movements of
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  Speaker 4: ships through the strait during that seasfire period, but very
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  Speaker 4: little really, and we're talking about, you know, a probably
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  Speaker 4: forty to fifty day lag between ships leaving the straight
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  Speaker 4: ufore moves and arriving at Singapore and certainly South Korea
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  Speaker 4: because it's those tankers move about the speed of a
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  Speaker 4: bicycle and so it takes time as a lag in
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  Speaker 4: the system. And so what we're seeing now is the
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  Speaker 4: last of the pre conflict shipments arrive in places like
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  Speaker 4: South Korea, and there really isn't additional places to source
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  Speaker 4: it from beyond there. You know that we've lost five
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  Speaker 4: ten percent at least of the global supply, and yeah,
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  Speaker 4: there's the potential if the conflict escalates for further shipments
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  Speaker 4: coming out through the pipeline. Across Saudi Arabia to be
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  Speaker 4: disrupted as well.
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  Speaker 2: So what measures would you like to say right now?
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  Speaker 4: Well, I mean we should at least be at phase two, right,
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  Speaker 4: you know, we should be saying that we should be
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  Speaker 4: conserving fuel. It takes time for people to adapt, you know,
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  Speaker 4: you have to think through and what can I actually
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  Speaker 4: do without How can I you know, economize and make do?
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  Speaker 4: And yeah, to some extent, price maybe forcing that issue.
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  Speaker 4: I think there is you know, signs that there's a
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  Speaker 4: lot of actual economic distress as a result of the
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  Speaker 4: price increases. But I think, you know, people just need
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  Speaker 4: time to adapt. And if we get to a situation
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  Speaker 4: where we're not signaling to people to start thinking about
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  Speaker 4: and making these changes strongly enough, then the assumption is
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  Speaker 4: the government's got under control, everything's fine, keep calm and
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  Speaker 4: carry on. And I don't think that that is a
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  Speaker 4: sensible risk mitigation strategy if you think about it in
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  Speaker 4: terms of, you know, the potential us running out of
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  Speaker 4: fuel to signal rationing and to kind of you know,
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  Speaker 4: force people to tighten their belts a bit now is
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  Speaker 4: a prudent risk management strategy To do nothing and then
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  Speaker 4: be caught short The fuel is potentially really bad.
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  Speaker 2: Yeah, do you think we are close to phase two?
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  Speaker 4: Well, as I said at the beginning of this, the
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  Speaker 4: criteria have been met, so we should be at phase two.
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  Speaker 2: All right then, Nathan, Nathan, really nice to talk to you.
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  Speaker 2: Thank you so much. That was Nathan surrendering there from
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  Speaker 2: the Wise Response Society, just talking about his thoughts. You're
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  Speaker 2: a couple of articles in the paper just recently, just
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  Speaker 2: a lot of people saying, actually, we should just be
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  Speaker 2: kind of taping a little bit more cautious than we
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  Speaker 2: are at present.
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