Christopher Luxon has warned Kiwis that “things could get worse before they get better” if the war in the Middle East drags on.

Speaking to media, the Prime Minister said he received a briefing on the situation in the Middle East this morning. He said it was understandable Kiwis would be concerned about the impact on their households.

Luxon said a group of ministers is meeting regularly to understand the impact the US-Israeli war on Iran is having on New Zealand.

“We are preparing for the worst-case scenario,” Luxon said.

He said the Government would be fleshing out the country’s National Fuel Plan and would detail any updates next week.

Luxon believed even if the conflict ended tomorrow, its impact would still flow through the economy and as such, the Government was preparing for a “8 to 12-week response”.

Finance Minister Nicola Willis opened by saying, “we live in challenging times.”

She felt New Zealand needed to prepare for low fuel stocks, even as she mentioned yesterday’s update on current stocks which the Government believes doesn’t require fuel rationing.

Willis said the Government would now be moving to make two fuel stock updates per week. The next was expected on Monday.

Willis said nations who send us refined fuel were struggling to get crude oil and as such, may be producing less fuel globally.

The Government would focus on three actions, including working diplomatic channels to access refined fuel and working closely with fuel companies to identify possible other sources of fuel by changing fuel specifications.

The Government was also considering “domestic prioritisation measures”, a likely reference to potential rationing. Willis said the Government would work closely with fuel companies to see what steps could be taken and she would update the country on that next week.

Asked when the country might need to move to the second alert level on the Government’s fuel plan, Willis assured it was not yet required given there was seven weeks’ worth of fuel in or coming into the country.

“We currently have fuel security.”

Christopher Luxon and Nicola Willis speak to media at a press conference regarding the Government's response to the conflict in the Middle East and its effects on New Zealand's fuel stocks and the wider economy. Photo / Mark Mitchell 

Willis acknowledged the pain of an increasing price at the pump, saying the Government wouldn’t be able to alleviate all of that pressure, however, any measures would be targeted on those most in need.

On what measures the Government could employ to help people, Willis said her focus was on helping families “directly”, recognising a blanket measure like reducing fuel taxes wouldn’t just help those in need.

Asked whether the Government was considering using Working for Families to assist people struggling to pay for fuel, Willis said she had instructed Inland Revenue and Treasury to assess options and acknowledged the focus would be on the “tax and transfer system”.

Willis said she had heard reports about how public transport usage had increased, people were utilising carpooling more and employers had been flexible regarding working arrangements.

“I will expect that to continue even when the Government has delivered support,” Willis said, adding it was “likely” petrol price increases will continue.

Willis said “there are a lot of predictions” but it was likely prices would go higher than they already are.

Luxon argued New Zealand was headed into this conflict in as strong a position as possible.

Asked for her requested advice on fuel price trajectory, Willis said the theme was “how long is a piece of string”.

She expanded, saying it would depend on a series of factors including when the Strait of Hormuz opens up, countries’ access to oil for refineries and the extent of damage to exploration fields.

“There’s no doubt about it, this is a conflict we cannot control,” Luxon said.

Cabinet hadn’t yet taken decisions on what support could be offered but Willis said it wouldn’t make sense to invent a new system and it needed to be targeted at households where budgets are most squeezed.

Willis accepted the fuel price increases were impacting all New Zealanders but cautioned it would be “irresponsible” to offer support to all Kiwis as it carried risks such as causing higher inflation and price surges which could put New Zealand into a “vicious spiral”. She also reiterated New Zealand was in a “far more unstable world”.

Willis said fuel stations running out of fuel represented challenges in logistics and distribution, but it also pointed to more people buying more fuel.

However, Luxon felt New Zealanders had displayed good behaviour by not stockpiling fuel.

Willis said fuel companies had expressed confidence in fuel stocks to ensure fuel would be available at fuel stations. She also noted storage constraints which fuel companies were operating under.

On whether New Zealand would use fuel with Russian origins, Luxon said he didn’t foresee changes to the country’s sanctions regime on Russia but highlighted the possibility of fuel suppliers struggling to access crude oil.

“Many other countries are frankly scrambling,” Luxon said of the global response to the fuel shortage.

Willis acknowledged that Cabinet’s position was that if relaxing fuel specifications was needed to assure fuel security, it was worth doing.

Christopher Luxon and Nicola Willis are preparing New Zealand for the "worst-case scenario" as the war in the Middle East continues. Photo / Mark Mitchell 

On the latest GDP figures, Willis said there were a “range of estimates” made but was happy with the third consecutive quarter of growth. She acknowledged a range of industries had seen expansion.

“I’ll be frank; that’s very backward-looking data, we are in a different world,” Willis said, a reference to the Middle East conflict and its impact.

Willis expected the economy would still keep growing this year, but it was uncertain whether it would grow as fast as expected.

Today’s gross domestic product (GDP) figures show the economy grew just 0.2% in December 2025, at the lower end of expectations.

The Reserve Bank (RBNZ) had forecast growth of 0.5%.

Economists expected it to be between 0.2% and 0.4%.

The data suggest a fragile recovery, which could be blown off course by the US-Israeli war on Iran.

This is the first time since the year ended September 2024 that the economy has recorded annual growth.

The data highlighted that while the economic recovery continued into the fourth quarter of 2025, the economy was “still fragile” with private demand noticeably lacking from the equation, ASB senior economist Kim Mundy said.

Given the “shadow” now being cast by the Iran conflict and oil price shock, the risks to the growth outlook were clearly skewed to the downside, Mundy said.

On the tone of today’s update, Willis said in the past few days, there had been growing certainty of a prolonged conflict and supply chain disruption that could persist long after the conflict ends. She noted fuel supply chains were healthy now but the Government was preparing for future disruption and wanted to be ready for a “range of scenarios”.

The war, which has effectively closed the Strait of Hormuz, has seen fuel prices soar and is likely to fuel inflation in other parts of the economy, including food.

As of March 15, New Zealand’s combined petrol, diesel and jet fuel stocks equated to about 49 days’ of cover nationwide, including fuel being held in storage and fuel on ships bound for New Zealand.

That is slightly below the levels held on March 8, when New Zealand had a combined 52 days of cover.

Earlier this week, Willis urged people not to panic-buy fuel.

“There are about 50 days of petrol and diesel in the country, or on the way here, which is normal,” she said, noting that petrol stations that had run dry had done so because they were offering heavily discounted promotions.