Cost of fuel rises 4c a litre today

WELLINGTON: Motorists, from today, will pay an additional 4c per litre to fill up their tanks.

This comes as the Government’s annual fuel excise tax takes effect.

This is the third consecutive year of increases, following similar moves in 2018 and 2019.

The National Party has since May argued that fuel tax should be delayed due to the impact of Covid19.

Opposition finance spokesman Paul Goldsmith yesterday released a statement today criticising the Government’s decision to go ahead with the move.

‘‘Over three years this Government is taking an extra $1.7 billion from New Zealanders through its fuel tax increases, road user charges, petrol excise and Auckland regional fuel tax,’’ Mr Goldsmith said.

AA spokesman Mark Stockdale noted that the drop in oil prices internationally would make this fuel price increase more manageable than in previous years.

‘‘There is usually an annual increase in petrol tax every year, along with the equivalent diesel road user charges to fund our transport system,’’ Mr Stockdale said.

‘‘This year is no different, although with the big drop in oil prices in February due to Covid19 global lockdowns, fuel prices are the lowest they’ve been since 2017 so the 4c increase is probably easier to swallow.’’

Mr Stockdale was concerned about how the tax was used.

‘‘The AA wants to ensure that motorists get good value for the fuel taxes they pay, and we are concerned that tax increases in recent years have been allocated to nonroad transport projects at the expense of a growing backlog of road maintenance work,’’ he said.

Mr Stockdale said tax makes up about 55% of the price of fuel at the pump — and a little more in Auckland.

The Ministry of Transport has addressed these concerns in a Q&A published on its website earlier this month.

In the statement, the ministry says all money from the tax will go towards ‘‘the National Land Transport Fund which helps fund the improvement, operation and maintenance of our land transport network’’.

The ministry stood by its decision to roll out the tax despite the effect of Covid19, explaining that money was necessary for the land transport network.

‘‘Investing in our transport network will help stimulate the economy and create jobs,’’ the ministry said.

The ministry also said the added funding was needed to complete existing projects and future ones.

The ministry said the increased fuel price would cost the average onevehicle household about $35 to $40 a year.

A bad deal for Aucklanders?

In a report released yesterday, economist Shamubeel Eaqub said Aucklanders were paying up to $140 million more for their fuel every year than they should be.

He based this estimate on the fact that falls in fuel prices had not been passed on to motorists.

‘‘Over the past year, fuel board prices have fallen by 29c across the country, but only 24c in Auckland and a huge 40c in Christchurch,’’ Mr Eaqub said.

He drew a stark contrast between the fuel prices of Auckland and Christchurch to illustrate his point.

‘‘In June 2019, Auckland prices were 10c15c lower than Christchurch. In the two weeks to 14 June, prices were 4 cents higher, excluding the regional fuel tax. Prices over the past year have fallen by 27c in Auckland, 50c in Christchurch and 29c nationally. These differences can cost a lot.’’ — The New Zealand Herald