New Zealand’s Motor Trade Association (MTA) and National Party leader Christopher Luxon have both has issued statements regarding the rising cost of petrol in New Zealand.
The remarks come as prime minister Jacinda Ardern aimed to quell some of the heat around petrol prices with comments earlier today, pointing out that most of the price increases stem from overseas forces and not government taxes.
The MTA warns Kiwi motorists against getting hostile against petrol companies and petrol station operators, in the midst of spiralling prices at the pump.
MTA Energy and Environment Sector Manager Ian Baggott that it makes sense for Kiwis to be “frustrated” with the price rises, adding that most of the rise can be attributed to the weak local dollar, rising crude oil prices, and other factors like Covid-19.
While the comments echo similar statements issued by the Automobile Association (AA) recently, the MTA also notes in the statement that some 52 per cent of the price of petrol stems from government taxes, ranging from the fuel excise levy to GST, placing a spotlight on the government’s role in fuel prices as they stand.
“It’s understandable that motorists feel frustrated – for many people it’s the last thing they need right now,” says Baggott. “But don’t blame the petrol companies, and especially, don’t blame the person behind the counter.
“Another 37% is made up of production and shipping costs. That leaves 10.6% as the wholesaler and retailer margin, out of which they have to pay staff and operating costs, leases, distribution and other costs.”
“Covid 19 has also had an impact. As countries around the world open up after Covid restrictions, they are resuming normal bulk fuel buying, which puts them at the head of the queue.”
According to the MTA, prices for crude oil overseas went up by around 25 per cent between December of last year and January this year. It notes that Australian prices are also increasing significantly, but they remain much cheaper than Kiwi prices due to fuel copping less taxes.
“All indications are that due to the rising cost of crude and the weak Kiwi dollar, prices are likely to continue rising here. There is certainly a possibility that we will see $3/litre for 91,” Baggott adds.
“We would ask motorists to remember that to a very large extent, these increases are beyond the fuel companies’ control – so don’t give the attendant an earful when you’re getting a tankful.”
As reported earlier today, some outlets in Auckland have already priced 91 octane fuel at over $2.90 per litre, with premium 95 and 98 already spotted around the country priced above $3.00.
As New Zealand’s next general election approaches, it seems increasingly likely that petrol prices will become one of several significant political footballs.
Speaking to local media today, National Party leader Christopher Luxon acknowledged that there are overseas forces at play with some of the national price rises, but noted that the government should be able to step in and reform fuel taxes to save motorists from paying the significant prices.
“Quite sobering this morning to read that fuel has $3.00 a litre. I think it’s emblematic of the cost of living crisis we’re seeing around the country,” said Luxon. “I appreciate the government will say there’s not much they can do about it, [but] we disagree. We think there’s things they can do around controlling government spending as we’ve been talking about.
“If we think about the fuel component, there’s a big part of regional fuel tax that we think can be taken away. […] It’s about controlling the things they can control in order to make sure this cost of living crisis doesn’t get worse.
“On the Auckland regional fuel tax there’s 500-and-something-million dollars that’s been collected. Less than half of it has actually been spent on projects, the rest of it’s just sitting in a bank account. And our view is that [stopping the tax] is something that they could do tomorrow. They could make that decision tomorrow and do something to control fuel prices there.”
