Fuel Supply Is Improving. Your Costs Are Not Falling.

International measures to improve diesel availability are gathering momentum. New Zealand’s reported fuel cover has increased, and manufacturing activity is strengthening.

But relief in the supply pipeline is not the same as relief on an invoice.

Diesel remains expensive. Global oil prices are elevated. Freight-related surcharges are adjusting. A relatively weak New Zealand dollar continues to influence import costs, while stronger manufacturing activity is not yet matched by equally convincing evidence of domestic consumer demand.

The nature of supply chain risk is changing. Physical availability may become more predictable, while pressure on margins, contracts and working capital persists. That distinction should guide purchasing decisions over the coming fortnight.

This Week in 30 Seconds

HSCM Solutions Supply Chain Stress Index

The immediate concern is increasingly about price volatility, uneven delivery timing and the lag between changing market conditions and charges flowing through commercial contracts.

That combination is particularly difficult for businesses carrying substantial stock, operating under fixed-price customer agreements or relying on imported inputs.

The assessment remains Elevated because physical availability and commercial affordability are recovering at different speeds.

Commercial Signal

Supply recovery does not automatically restore margins

A shipment arriving on time can still damage profitability if its landed cost exceeds the assumptions used to price the customer order.

International diesel measures may improve availability, but they do not guarantee an immediate reduction in New Zealand pump prices, transport charges or freight surcharges.

Likewise, stronger manufacturing activity is encouraging, but it does not justify rebuilding inventory without evidence of customer demand.

For procurement and supply chain teams, the practical response is to separate three decisions:

What must be secured? What can be deferred? What cost can be recovered?

Treating these as distinct questions is more useful than making a broad judgement that supply conditions are improving.

This Week’s Number

Weekly Diesel Price Tracker

Source: MBIE adjusted retail diesel price series. Prices include GST and exclude Road User Charges.

The latest reading is 54.0c/L higher than on 4 September.

For an operator purchasing 10,000 litres, that movement represents approximately NZ$5,400 in additional fuel cost at the published retail prices, before accounting for recoverable GST, discounts or contractual arrangements. This is an illustration of price exposure, not a calculation of any individual operator’s actual increase.

MBIE’s adjusted retail series should not be confused with a commercial fleet’s contracted purchase price.

The timing matters

MBIE published the latest reading on 14 October, covering prices observed through 9 October. Brent’s 16 October settlement postdates that observation period. This creates potential additional cost risk, although the timing and extent of any pass-through to New Zealand prices remain uncertain.

For businesses, the management question is whether higher fuel costs are being recovered through pricing, fuel adjustment mechanisms or customer agreements. If the recovery mechanism lags the purchase price, the business finances the difference. That gap deserves attention even if international supply conditions continue improving.

Leading Signals vs Current Reality

1. Fuel, Energy & FX

More supply is visible, but much of the diesel remains offshore

MBIE’s fuel stock snapshot as at 11 October reported 50.6 days of total diesel cover, compared with 46.0 days previously. The composition is important.

Of the reported total, 27.2 days were physically in New Zealand, 6.4 days were aboard ships within the exclusive economic zone, and 17.0 days were aboard ships outside it. In-country diesel cover had fallen from 29.1 days in the previous snapshot. The increase in total cover was therefore largely attributable to fuel still on the water.

MBIE also reported 11 fuel ships inbound, while importers had indicated confidence in planned supply extending approximately three months. These developments improve forward visibility. However, offshore stocks cannot meet immediate domestic demand until the relevant vessels arrive, discharge their cargoes and enter the distribution network.

The government’s diesel reserve at Marsden Point is excluded from MBIE’s reported total. For operators, the distinction between total cover and immediately available fuel remains commercially relevant.

International diesel relief is becoming more tangible

On 15 October, the International Energy Agency agreed to accelerate the remaining emergency stock releases from its March collective action. The IEA reported approximately 330 million barrels already released, with around 100 million barrels remaining, including more than 20 million barrels of diesel to be accelerated. This is an acceleration of previously agreed releases, not an announcement of an additional emergency stock programme.

Russia has also partially resumed producer diesel exports from 10 October. A shipment of approximately 40,000 tonnes reportedly loaded on 13 October for Morocco.

These are meaningful supply developments. However, announced volumes, scheduled movements and confirmed deliveries are different stages of the supply chain. The eventual benefit to New Zealand will depend on international product markets, shipping availability, regional pricing and actual delivery timing.

Hormuz remains a serious risk

Reports of attacks affecting commercial shipping near the Strait of Hormuz during the week to 16 October reinforced uncertainty in international energy markets. The Singapore Maritime and Port Authority reported that the Singapore-flagged container ship GFS Pride was struck on 13 October and subsequently sank, with its crew evacuated. The wider disruption continues to affect confidence in shipping routes, marine insurance and energy supply.

Brent December futures settled at US$109.86 per barrel on 16 October, approximately 4.9% higher for the week.

Emergency stock releases can support physical supply, but they cannot eliminate the commercial consequences of disrupted shipping routes. For New Zealand businesses, those consequences may include higher refined fuel costs, insurance charges, freight adjustments and delivery uncertainty.

NZD provides limited protection

The Reserve Bank of New Zealand’s 16 October fixing placed NZD/USD at 0.56255, compared with 0.56085 a week earlier. The trade-weighted index was 64.11.

At NZD/USD 0.56255, a US$100,000 supplier invoice equates to approximately NZ$177,762, before bank charges or hedging. A relatively weak New Zealand dollar continues to amplify the local-currency cost of US-dollar-priced imports.

Businesses exposed to fuel, freight and imported materials should therefore review the combined effect of international prices and exchange rates rather than considering either in isolation.

2. Freight, Ports & Network

Global and regional freight markets are moving differently

Drewry’s 15 October freight indices showed diverging conditions. The World Container Index increased 3% to US$4,485 per 40-foot container, while the Intra-Asia Container Index declined 3% to US$1,453.

The global increase was driven primarily by major east-west trades. Within Asia, Shanghai to Singapore rates declined 7%. Neither index directly measures freight rates to or from New Zealand.

For local importers, this reinforces the need for shipment-specific quotations. Routing, equipment availability, carrier surcharges, transit time and destination charges can produce different commercial outcomes even when headline benchmarks move in the same direction.

An improving regional index may create an opportunity to negotiate. It does not guarantee a lower landed cost.

Port of Auckland fuel charges rise again

Port of Auckland’s fuel adjustment factor for a full import or export container increased from NZ$15.00 to NZ$17.50 on 9 October. A further increase to NZ$20.00 takes effect on 6 November. Across those adjustments, the charge rises by NZ$5.00 per full container, or 33.3%.

This is a percentage increase in the specific port charge, not in the total cost of freight. The change illustrates how earlier fuel-price increases can continue passing through supply chains after the underlying market begins moving differently.

Domestic courier charges show another timing pattern. NZ Couriers’ variable fuel factor is 14.30% from 19 October, down from 14.40% the previous week. Different providers use different calculation periods, thresholds and adjustment schedules. Businesses should therefore check each supplier’s current terms rather than assume all fuel-related charges will move together.

Christmas and Labour Day planning

Previously published Oceanbridge guidance identified 30 October cargo-ready dates for some Asian feeder ports and 6 November for direct ports for pre-Christmas shipments. These dates should be reconfirmed against current carrier schedules and actual bookings.

Monday, 26 October is Labour Day. Importers should review customs clearance arrangements, container free time, transport availability and warehouse receiving hours ahead of the long weekend. Small interruptions can become expensive when vessel arrivals, delivery bookings and customer dispatch commitments are tightly connected.

3. Demand, Manufacturing, Trade & Dairy

Manufacturing strengthens, but inventory still needs to earn its place

New Zealand’s September BNZ-BusinessNZ Performance of Manufacturing Index reached 56.5, up from a revised 53.3 in August. Production and new orders both registered 57.0, while employment returned to expansion at 51.8. These are encouraging signs of stronger manufacturing activity.

However, finished stocks reached 59.0, while September retail electronic card spending declined 0.4%. Core retail spending fell 0.7%.

These indicators measure different activities. Manufacturing serves exporters and business customers as well as domestic consumers. A finished-stocks PMI above 50 means more respondents reported increasing stocks than decreasing stocks. It does not establish that inventory is excessive.

Nevertheless, the combination raises an important commercial question: is production increasing to meet confirmed demand, or is working capital accumulating in finished goods?

At current freight, fuel and financing costs, unnecessary inventory is expensive. It absorbs cash, increases holding costs and can create future discounting pressure if sales do not materialise.

For manufacturers, the priority is to compare production schedules with confirmed orders and expected deliveries. For distributors and retailers, replenishment should reflect SKU-level demand, lead times and stock ageing rather than broad expectations of economic recovery.

Dairy prices improve

The latest verified full Global Dairy Trade auction, held on 6 October, recorded a 1.2% increase in the overall price index. Whole milk powder increased 1.2% to US$3,605 per tonne, while skim milk powder rose 4.3% to US$3,847 per tonne. The next full auction is scheduled for 20 October.

The result is constructive for parts of New Zealand’s export economy, but one auction does not establish a sustained demand trend. Dairy businesses should assess price movements alongside confirmed sales, production requirements and shipping commitments.

NZ-India trade opportunities begin

The NZ-India Free Trade Agreement is scheduled to take effect on 20 October. According to NZTE, the agreement provides tariff elimination or reductions across approximately 95% of New Zealand exports, with 57% duty-free from the first day. Initial benefits include sheepmeat, wool and much of the forestry sector, with additional reductions scheduled for 1 January 2027.

For New Zealand importers, the agreement may also create tariff savings on eligible Indian goods, depending on the applicable tariff line. However, preferential treatment is not automatic. Businesses should confirm tariff classification, rules of origin and supporting documentation against NZ Customs and MFAT guidance before incorporating savings into landed-cost calculations.

4. Rates & Compliance

CPI and OCR decisions could change financing assumptions

New Zealand’s Official Cash Rate currently stands at 2.75%. The next decision is scheduled for 28 October, following the September-quarter CPI release on 22 October. Published commentary indicates that both an unchanged OCR and a 25-basis-point increase remain possible.

For supply chain operators, the important issue is not predicting the exact policy outcome. It is understanding what different outcomes mean for financing costs, inventory decisions and customer demand.

A business carrying expensive imported stock may face pressure from several directions. Higher purchase prices increase the amount of working capital required. Higher financing costs, if they occur, make that inventory more expensive to hold. Slower customer demand can extend the time before cash is recovered.

Businesses should therefore test purchasing and inventory decisions against both an unchanged OCR and a modest increase, without treating either outcome as certain.

US lamb investigation remains unresolved

The United States International Trade Commission held its lamb safeguard injury hearing on 16 October. Post-hearing submissions are due 23 October, US time, with the injury determination scheduled by 13 November. No outcome should be assumed.

Affected exporters should monitor the formal process and consider potential tariff or quota scenarios without treating them as enacted restrictions.

What Smart Operators Are Doing Now

Four practical priorities stand out this week.

• Reconcile fuel exposure against customer recovery. Compare actual fuel purchase costs with contractual surcharge mechanisms. Check calculation periods, reset dates and recovery thresholds. Identify any unrecovered cost gap and quantify its effect on margin.
• Refresh the full landed cost. Update current shipments for freight quotations, exchange rates, port charges, fuel adjustments, inland transport and applicable duties. Pay particular attention to orders priced several weeks ago.
• Challenge inventory additions against confirmed demand. Use the stronger manufacturing PMI as a reason to review the order book, not as automatic justification to increase stock. Check customer commitments, stock ageing, turnover and expected cash conversion before placing additional orders.
• Prepare for the next fortnight’s decision points. Review the CPI release, OCR decision, tariff developments and scheduled surcharge changes. Make sure procurement, finance, operations and sales are working from the same assumptions.

These actions do not require a perfect forecast. They require accurate information about existing commitments and a disciplined process for responding when conditions change.

HSCM Solutions Base Case

Availability improves unevenly. Costs remain elevated.

The HSCM Solutions base case is for international supply measures and the shipping pipeline to gradually improve fuel availability, while domestic prices and related surcharges remain elevated in the near term. Continued volatility is more likely than a smooth return to earlier cost levels.

Manufacturing activity may remain comparatively resilient, but softer retail demand makes broad inventory expansion difficult to justify without stronger order evidence.

Key Triggers

Three developments would warrant reassessment of this outlook.

• Fuel availability: A material deterioration in confirmed deliveries or in-country diesel stocks would increase the risk of renewed operational disruption.
• Cost pressure: A sustained change in international oil prices, domestic diesel readings or fuel adjustment factors would alter the near-term landed-cost outlook.
• Customer demand: Clear evidence that new manufacturing orders are translating into deliveries, sales and improved inventory turnover would strengthen the case for selective inventory rebuilding.

These are planning scenarios, not price or monetary-policy forecasts.

The practical stance is cautious, not defensive. Protect supply where interruption would be costly, but avoid locking in unnecessary inventory solely because conditions remain uncertain.

Dates to Watch

The Week in Context

Last week’s brief was titled “Relief Announced. Pressure Remains.”

This week, some of that relief has become more tangible. Russia has partially resumed diesel exports. The IEA has agreed to accelerate remaining emergency releases. New Zealand’s reported total diesel cover has increased.

But the commercial picture has not improved to the same extent. Brent rose sharply during the week, domestic diesel remains expensive and Port of Auckland fuel charges are scheduled to climb further. At the same time, stronger manufacturing activity is accompanied by rising finished stocks and softer retail spending.

For New Zealand businesses, the distinction is clear. Better supply availability does not automatically mean lower costs. Stronger production does not automatically mean stronger sales.

The operators best placed to manage this period will be those with accurate landed costs, clear contractual recovery mechanisms, reliable supplier visibility and purchasing decisions linked to genuine customer demand.

Supply relief is encouraging. Margin recovery still has to be managed.

Actual orders remain the planning base.

Sébastien Mallevialle CSCP | HSCM Solutions
sebastien.mallevialle@hscmsolutions.com | hscmsolutions.com
Published every Monday | Issue #22 | 19 October 2026 | Figures current to latest available data as at 18 October 2026 | Next: Monday, 26 October 2026

This publication is provided for general informational purposes only and reflects the author's independent analysis of publicly available information at the time of writing. It does not constitute financial, legal, tax, investment, or professional advice. Readers should seek independent professional advice before making decisions based on this content. While reasonable care has been taken in preparing this publication, HSCM Solutions makes no representations or warranties regarding its accuracy, completeness, or suitability for any particular purpose and accepts no liability for any loss arising from reliance on this publication.

Sources: MBIE weekly fuel price monitoring and fuel-stock updates · International Energy Agency statement of 15 October · Singapore Maritime and Port Authority · CNBC · Bloomberg · Reserve Bank of New Zealand exchange rates and monetary policy publications · Stats NZ · BNZ-BusinessNZ · Drewry World Container Index and Intra-Asia Container Index · Port of Auckland · NZ Couriers · Oceanbridge · Global Dairy Trade · NZTE · MFAT · NZ Customs · United States International Trade Commission