Mobil New Zealand is to dismantle and remove its fuel storage facility in Milford Sound rather than sell it to another company.
Civil Defence in Southland and helicopter operators are angered by the company's decision to turn off its pumps in June, saying it will jeopardise search and rescue missions.
Mobil New Zealand says the facility was closed because it needed significant upgrading, the cost of which was not commercially viable.
Mobil spokesperson Alan Bailey says environmental concerns are behind is unwillingness to sell the facility to another company.
Civil Defence says it has to get fuel from Te Anau and Queenstown, and some helicopter operators are also stockpiling fuel.