About Z

Clarification around butane blending case

21/03/2013 - General News

Following reported comments from fuel company Gull in the media, Z Energy today said legal action regarding Gull’s practice of blending additional butane into its petrol was not of concern to Z or in any way related to it.

Gull is currently involved in a legal case with the New Zealand Customs Service over the company’s practice of blending additional butane into petrol. Butane contains less energy than petrol and is taxed at a significantly lower rate to mineral petrol.

“Gull has repeatedly suggested its court case has implications for the rest of the industry yet we are not aware of any other company deliberately blending additional butane into its petrol before selling to customers,” said Z Energy.

“Gull is seeking to highlight the completely different process by which leftover fuels from terminal and pipeline operations are blended back into fuels to prevent them being flared or otherwise destroyed and wasted.

“This is an unavoidable operational practice that companies try as hard as they can to minimise. It is an entirely separate issue – the legal action relates to a single company seeking to reduce the level of tax they pay. It has nothing to do with companies seeking to manage an unavoidable by-product from fuel processing as efficiently as possible. 

“Z has been represented in constructive engagement with Customs on this issue for some time now, through the industry joint venture Wiri Oil Services Limited (WOSL). The volumes for Z in the re-blending process are very small across all operations and we view these comments as a deliberate distraction and a side issue. 

“We have every confidence that these discussions will be satisfactorily concluded through a process which is well underway.” 

Jonathan Hill: 04 498 0212, 021 440 090