New Zealand to release 21,000 barrels of oil industry stocks

New Zealand is to contribute to international oil supplies following Hurricane Katrina from existing industry stocks of petrol and diesel, Energy Minister Trevor Mallard said Friday.

In response to the International Energy Agency's call for collective action following Hurricane Katrina, the IEA's 26 member countries have agreed to make available to the market 60 million barrels of oil (including refined product) or 2 million barrels per day over a 30 day period.

New Zealand's share of this total is 0.3 percent or just under 7,000 barrels per day, which is equivalent to about 5 percent of consumption.

In terms of how other countries are responding to the IEA request, 94 percent of the requested reduction is through stock release, 3 percent is through demand restraint, and 3 percent is through increased production.

"New Zealand oil industry stocks are already being reduced during September in preparation for new low sulfur diesel and low benzene petrol specifications which take effect from 1 January 2006. This reduction will enable us to meet the IEA target," said Mallard.

He said the industry stocks will be built back up in the following months. In addition, the government will hold tenders early next year to acquire additional stocks to reach the IEA target of 90 days. Current stocks are about 70 days.

Mallard said although New Zealand is able to meet its contribution by drawing on stocks, motorists should be aware that petrol prices are likely to remain high. He said it makes sense to reduce consumption by driving sensibly, avoiding unnecessary travel, keeping cars tuned and checking tire pressures.

"Common sense measures to reduce demand will ease pressure on petrol prices and are good for the wallet, the economy and the environment," said Mallard.

Source: Xinhua