ZEL, NZR, NZO: Stocks in news as biofuel mandate may push fuel prices

Highlights

• PM Jacinda Ardern confirmed on Monday that the Government was planning to go ahead with the biofuel mandate.
• The Government is bringing the biofuel mandate to bring longer-term stability and fuel security while also reducing GHG emissions for NZ.
• Z Energy, NZR and NZO are 3 oil & gas stocks from NZ.

Prime Minister Jacinda Ardern confirmed on Monday that the Government was planning to go ahead with the biofuel mandate to ensure greater fuel security while reducing greenhouse gas emissions.

However, National Party has alleged that the mandate would only add to fuel costs borne by Kiwis. Official reports have revealed that the proposed biofuel mandate will add between 5 and 10 cents per litre to fuel costs. 

The Party spokesperson stated that the move could burn a hole in Kiwis’ pockets by taxing them via the Emissions Trading Scheme and the biofuel mandate. Kiwis are already facing the high cost of living amid high inflation, interest rate hikes and the Russia-Ukraine conflict.

On this note, let’s skim through the performance of 3 NZX fuel stocks.

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Z Energy Limited (NZX:ZEL, ASX:ZEL) 

Z Energy revealed on Friday that its shareholders had voted in favour of the scheme to sell its business to Ampol for nearly $2 billion. The voting results showed that 98.73% of the shareholders voted in the deal’s favour and 1.27% against it.

ALSO READ: Will fuel prices rise again? Check out 2 NZX Oil & Gas stocks

The Group now looks to obtain approval from the Overseas Investment Office and subsequently. conclude the Scheme with Ampol.

Shares of Z Energy traded flat on Monday to close at $3.74.

The New Zealand Refining Company Limited (NZX:NZR)

Refining NZ announced on Friday that it would be changing its name to Channel Infrastructure NZ Limited with a ticker of CHI on 1 April 2022. The Company will also turn into an import-only fuel terminal from 1 April that will help it in tapping more growth opportunities and support the country’s future fuel needs.    

ALSO READ: MCY, GNE, CEN: Energy stocks in news as power bills set to rise

NZR also plans to implement its long-term financing strategy this year to make sure its debt financing plans are aligned to a business with a competitive cost of debt.

Shares of Refining NZ traded flat on Monday to close at $1.07.

New Zealand Oil & Gas Limited (NZX:NZO) 

NZO notified on 18 March that its subsidiary Cue Energy had updated that its oil production well PB-09 in Indonesia had been drilled successfully and was producing an average of nearly 500 barrels of oil every day.

DO READ: NZO, ZEL & NZR: Oil & gas stocks gain as govt announces fuel tax cuts

NZO is reviewing funding options and forming an action plan for development in Indonesia, Kupe field and the Amadeus basin.

Shares of NZO traded 0.93% in green on Monday to close at $0.54.

Bottom Line

The Government is bringing the biofuel mandate to bring longer-term stability and fuel security while also reducing GHG emissions for NZ. Official reports have stated that any implied increase in fuel prices could be absorbed by the economy without putting a loss on the economic activity.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)