Nicola Willis has ruled out fuel subsidies for New Zealanders as the ongoing conflict in the Middle East hikes up global oil prices.
The Finance Minister is keeping a close eye on the price of a barrel of oil and said the latest situation update she had from Treasury was that a $10 sustained increase in price "translates to 10 cents more at the pump for a Kiwi petrol user".
"What we saw last week was that oil prices went up about $10, but you're still seeing fluctuation today."
Asked whether she would consider subsidies to ease the burden on petrol users if prices were to increase substantially, Willis definitively ruled it out, saying "the evidence internationally is that they're very difficult to sustain".
"I watched the pain the last government went through when it attempted something like that.
"What we actually need to do is ensure across the board we're doing everything we can to keep inflation low," Willis said.
The previous Labour government cut 25 cents a litre off fuel prices in 2022, during the heat of the cost of living crisis in the aftermath of Russia invading Ukraine.
It then extended it to late January 2023, before extending it again at a lower rate to the first of July of that year.
Labour leader Chris Hipkins. Photo: RNZ / Mark Papalii
Labour leader Chris Hipkins wouldn't be drawn on whether the Coalition should be cutting fuel prices, saying that was for the government to form a view on.
"You'll note that we reduced the price of fuel when we were in government because we were faced with a very similar set of circumstances," he said.
Asked if he had regrets about the decision given at some point the cut has to be put back on again, Hipkins reflected it hadn't done wonders for Labour's re-election bid.
"Clearly the prices went back on in July and that's about the time our polling went dramatically downwards, but there were other factors at play there," he said.
"I'll just say that our record is that we lowered fuel tax when the prices were at their peak."
Willis told reporters at Parliament on her way to caucus on Tuesday morning there were two things at play when it came to the impact global oil prices might have on New Zealand.
The first was whether the supply chain would be disrupted and "the second issue is whether or not there's responses from oil producing nations in terms of how they release the supply of oil".
Hipkins said the global turmoil unfolding was a "pretty nerve-wracking time for the world".
"Any time nuclear weapons are mentioned in any context in these kinds of global contexts a shiver goes down the spine, because as I said, we're never going to bomb our way out of the nuclear arms race, and any suggestion we can do is catastrophic for the world."
Having just returned from a week in Denmark and Ireland, Hipkins said "it's fair to say tension is high on that side of the world at the moment, understandably so".
'It's a good place to be out of actually' - Collins
Defence Minister Judith Collins. Photo: VNP / Phil Smith
Defence Minister Judith Collins said the New Zealand Defence Force Hercules was still en route to the Middle East, having departed Whenuapai airbase at 9am on Monday.
Airspace in the region has been restricted, but she said once it opened up the Hercules would be able to "move quickly" to get New Zealanders out.
"That's the point of being based there.
"The Middle East is a very challenging environment, and I always think with the Middle East, it's a good place to be out of actually."
Collins said New Zealanders in the region had been warned for months to "get the hell out of there".
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