Finance Minister Nicola Willis says the Government will extend its temporary fuel support measures, saying ‘based on the data in front of us, it remains too soon to declare a sustained stabilisation in the fuel price’

The Government has decided to keep temporary fuel support measures in place for now as petrol prices are likely to remain above $3 a litre through August and September, Finance Minister Nicola Willis says.

In March, the Government made a tweak to the in-work tax credit which gave low-middle income families with children up to $50 a week to help with the impact of rising fuel costs caused by conflict in the Middle East. This was followed by a temporary increase to mileage rates for home and community support workers and relief teachers.

Speaking at a post-Cabinet press conference alongside Prime Minister Christopher Luxon on Monday, Willis said Cabinet had decided to keep these temporary fuel support measures in place for now but they are under “active review”.

“When the Government introduced these measures, we indicated they would be temporary, either lasting for a limited 12-month period or until fuel prices had stabilised, whichever came sooner.”

Initially, having 91 octane below $3 a litre for four weeks in a row was considered an indicator or a trigger of fuel price stabilisation and a “juncture” point for the Government to consider whether to remove the fuel supports, she said.

“While New Zealand did experience four weeks of national average prices falling below $3 between 5 and 26 July, we are advised that they rose above that point again last week," Willis said.

“Given increases in the international oil price, prices could remain above $3 into the coming weeks.”

Willis, who had been advised by Treasury, told Cabinet that "as of 28 July, based on pricing in international oil futures markets, our forecasters were expecting prices would likely remain above $3 through August and September before falling again”.

The oil price path and therefore the national fuel price was difficult to predict, and the situation in the Middle East continued to be volatile, she said.

“Today, there are some welcome signs of de-escalation in the Middle East. However, based on the data in front of us, it remains too soon to declare a sustained stabilisation in the fuel price."

Willis said she would report back to Cabinet if petrol prices fell below $3 in the future.