Fuel Quarterly Monitoring Report Explanatory Note
Changes in fuel importer cost model from quarter ending June 2025.
Background
The Commerce Commission has developed an importer cost model using a range of data sources to support its assessment of competition in engine fuel markets. The model has been developed in consultation with industry experts and fuel market participants.
The current importer cost model took effect from the quarter ending June 2025, replacing the previous model developed by the Ministry of Business, Innovation and Employment (MBIE).
Purpose
This note provides an overview of the data and methodology changes in the fuel importer cost model used in the Commerce Commission’s Fuel Quarterly Monitoring Reports. It also outlines the impact of changes on overall importer cost estimates.
Changes to the model are applied retrospectively. As a result, the most recent quarterly report may present different results for a given period compared with earlier publications. This note is updated as changes are implemented.
Table 1 Summary of updates
| Date | Change implemented | Description of changes | Summary of impact |
| March 2026 | 30 day rolling average quality premium | To support enhanced weekly monitoring of the Middle East conflict, a 30 day rolling average was introduced to smooth short term volatility in costs arising from supply disruptions. | Previously reported importer costs have increased by up to 1 cpl in some quarters. |
| December 2025 | Refinements to terminal mapping | Adjustments were made to improve the mapping of terminal locations within the model. | Previously reported importer costs for the March, June and September 2025 quarters have increased by 2–3 cpl. |
| June 2025 | Initial implementation of the Commission’s importer cost model | Further details below | |
Further detail on the June 2025 model introduction and subsequent refinements is set out below.
June 2025: Initial implementation of the Commission’s importer cost model
From the quarter ending June 2025, the Commission implemented a new importer cost model, replacing the previous estimates developed by MBIE1
The Commission’s model introduces a number of changes to better reflect the costs of importing fuel into New Zealand. In particular, it:
- includes costs associated with the operation of fuel terminals
- incorporates industry-informed assumptions for shipping, insurance, losses, demurrage and wharfage
- adopts fuel purchase cost methodologies that better reflect New Zealand fuel quality specifications.
In applying the model, importer costs are incorporated differently across reported pricing measures. For wholesale prices and their components, importer costs are calculated on a terminal-specific basis, reflecting differences in shipping routes and terminal operations.
For retail prices and their components, importer costs are estimated using a national average weighted by terminal volumes, as terminal-level information is not available for retail sites. Based on this, tables 9 and 12 in the quarterly report will report different results for the same quarter.
These methodological differences reflect the level of detail available in the Commission’s data sources and do not affect the underlying cost estimates, but rather how those costs are represented across the reported indicators.
The key differences between the Commission’s model and MBIE’s approach, and their general impact on importer costs, are set out in the table below.
Table 2 Comparison of importer cost models
| Changes | Commission’s importer cost build model | MBIE’s importer cost estimates | Impact of Commission cost build model on overall importer costs |
| Terminal costs | Inclusion of costs associated with the operation of terminals | No inclusion of terminal costs | Increase in costs associated with importing and storing fuel |
| Assumptions for shipping, insurance and losses and demurrage and wharfage | Updated assumptions for insurance, losses and demurrage, informed by industry consultation. Shipping and freight adjustments from Worldscale (annual) and Baltic Exchange (daily). Average of wharfage fixed rates for the relevant period from Ports of Tauranga, Wellington and Lyttleton. |
Quarterly rates for insurance and losses determined by an independent advisor - Envisory. Shipping and freight adjustment from Argus Media (weekly) and Envisory (quarterly). Wharfage from Envisory (quarterly). |
Small decrease in cost |
| Diesel: Fuel purchase costs | Use of 10 sulphur ppm2 (New Zealand standard) | Use of 50 sulphur ppm | Small increase in cost |
| Regular 91 and Premium 95: Fuel purchase cost | Using market prices and comparator fuels, a blended model provides an estimated cost for purchasing Regular 91 and Premium 95. | Fixed quality differential applied at the start of each quarter. | Increase in cost |
| Refining costs for Diesel, Regular 91 and Premium 95 | Addition of a fixed quality premium of:
|
Included in the fixed quality differential (see above) which is applied at the start of each quarter. | Increase in cost |
1 MBIE Weekly Fuel Price Monitoringopen_in_new calculated by MBIE using their Weekly Fuel Price Monitoring Methodologyopen_in_new.
2 ppm = parts per million, to express the concentration of sulphur in diesel
3 bbl = barrel, where one barrel is equivalent to 42 US gallons (approximately 159 litres)