New Plymouth's mayor is blaming the last Government's gas policy for Methanex's proposal to scale down.

The country's largest gas user plans to move from a two-plant operation to one, and lay off staff for the foreseeable future.

Its managing director says policy settings since 2018 haven't been conducive to sustaining gas supplies for more than one plant.

Neil Holdom says it'll be a blow for the region, but the writing's been on the wall.

"We saw this coming in 2018, with the last Government's flawed energy policy. This is a direct and logical consequence that was always going to happen - we told them it would happen."

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