Z Energy exploring EV ‘opportunity’

The electric vehicle (EV) disruption presented to the fuel industry is still a way off and Z Energy has time to prepare.

That’s the message from Z Energy board chairman Peter Griffiths to its annual shareholders meeting in Wellington on June 21.

A few shareholder questions related to Z Energy’s future and EVs.

“Yes, disruption is coming to our industry, but it is a long way off,” Griffiths says.

“We are good for another 10 years and beyond that,” he says, adding there’s still much value to be gained from the company’s existing business.

Griffiths says Z Energy is “exploring options”.

“We don’t really see EVs as a threat, but rather as an opportunity,” he says, explaining that Z is working on diversifying in many areas.

These include “future fuels” with a focus on adoption of low and zero carbon products, mobility in the future movement of people and “last mile” ways to leveraging Z’s service station network for goods and services delivery.

“We believe that from the middle of the next decade, demand for petrol and diesel will start to decline as traditional internal combustion engines are replaced in greater numbers by electric vehicles. We can see the ‘sunset’ coming.”
Griffiths says Z Energy has time to prepare and the benefits of seeing how the decline plays out in other world markets before happening here.

He expects the liquid fuels market to remain an essential part of New Zealand’s economic success during the coming decade.
Petrol prices reached a new high recently with international crude and product prices recovering from an extend period of record lows, while government levies and a regional fuel tax kick in, Griffiths says.

He says the fuels market remains competitive with 23 retail brands now involved and the number increasing. Areas of low price or discounting are moving all over New Zealand as a result – not a blanket cheap in the north and pricey in the south as often reported, he says. “The cheapest fuel in the last month was actually in Invercargill.”

Griffiths also covered the September Marsden refinery to Auckland fuels pipeline disruption, saying it took considerably longer to come right in satisfying not just the immediate shortfall but also to rebuild stocks.

Progressive closure of other Auckland fuel facilities, particularly those in Freeman’s Bay, meant increasing reliance on the pipeline and that any issues would impact Auckland’s supply very quickly, he says.

Z Energy intends working with the Government’s inquiry into supply chain resilience and help improve it where it makes commercial sense to do so.