‘Can’t sustain the pain’ — high fuel costs hit firms hard
Businesses hiking charges to cope with squeeze
Northlanders are calling on the Government to find genuine solutions to the cost-of-living crisis as “disgusting” petrol prices reach record highs.
Skyrocketing fuel prices are causing massive amounts of pain at the pump, with households paying the ultimate price as businesses are forced to pass on costs — despite the Government cutting the petrol excise duty.
And don’t expect the pain to go away anytime soon; the Automobile Association predicts it’s only going to get worse and Northlanders should brace themselves to feel “very uncomfortable” until at least Christmas.
Sharon Korach, who owns Driving Miss Daisy Kerikeri-Far North, said fuel prices have greatly affected her business.
She has six vehicles on the road, including two mobility vans that run on 95 octane, “so you can imagine with prices, they’ve gone sky high”.
Korach said the Government needs to “step up again” as temporarily reducing the petrol excise duty by 25 cents “seemed very short-lived”.
“Since the last decrease it’s started creeping up and up and up,” she said.
“We’re on the road supporting people with disabilities and impairments, so we need help. I’m going to go downhill otherwise. It’s ridiculous.”
Korach said she was going to adjust her prices in April to incorporate the petrol price increases.
“I haven’t done that yet, but I’m certainly in the throes of upping my prices to align with those petrol costs.
“Otherwise it’s a loss to your business, that’s the reality of it.”
Tradies are also having to pass on costs to clients.
Ian Rikys, from Ian Rikys Builders in Kerikeri, said he used to be “more relaxed” about charging for travel costs but now he has no choice but to pass them on.
“I never used to charge for travel to jobs out of town but I do now when it’s costing $200 to run a ute in diesel.
“At the end of the day, it costs the customer because you pass it on.”
Rikys said he and his workers carpool more often now, and he gets suppliers to deliver materials instead of towing them to sites himself.
His ute used to cost $110 to fill, “now it’s $190 — it affects everything.”
Rikys, who coaches the under-18s at Kerikeri Rugby Football Club, said many parents can’t afford to run their kids to games held further afield.
It’s not just rugby, Rikys said, it’s happening in all sports played by youngsters who rely on their folks to get to games.
“Clubs won’t travel to other unions because the parents can’t afford to take their kids.
“The kids miss out at the end of the day.”
Petrol cost $3.37 a litre for 95 octane in Kerikeri yesterday, $3.17 for 91, and $3.02 for diesel. It was one or two cents cheaper in Whangārei; $3.36 for 95, $3.14 for 91 and $2.97 for diesel.
Those with vehicles that run on diesel, such as many Northland tradies and farmers, have additional road user charges to pay.
National Road Carriers Association board member and former chairman Don Wilson said the fuel prices were “disgusting ”.
The consumer is having to pay for it at the supermarket and the shops because “everything you buy has been transported by a truck”.
“The rural sector can’t survive with the continuation of these increases in fuel prices,” Wilson said.
“We have to keep passing the costs on. “It’s been going up and up for the last four weeks, we don’t have any choice but to pass that on because we can’t sustain the pain.”
Wilson owns the business OnRoad Transport, which has 30 trucks servicing
mainly the rural sector from the Waikato and further north.
Government cuts to fuel excise duty and road user charges “weren’t making any difference”, he said.
“Fuel is going to continue to keep rising.
“We’re doing everything we can to minimise the running around we do but everything in the rural sector has still got to move.
“It comes at a higher cost than what we’ve ever had to front up with before.”
In March the Government reduced fuel excise by 25 cents a litre for three months, but since then prices have steadily increased to record highs.
Road user charges were also cut by 36 per cent across all legislated rates until the end of July.
In the May Budget announcement, the Government extended the reduction in fuel excise duty for two months until mid-August.
At the time Finance Minister
"We could be seeing another 30 to 40 cents a litre or more. It’s going to get very uncomfortable."
Grant Robertson said the Budget was being delivered “against the backdrop of a global inflation spike, with existing supply chain pressures being exacerbated by pressure on oil prices from the war in Ukraine”.
Automobile Association principal policy adviser of motoring affairs Terry Collins said “nothing” could be done about the current situation.
“It’s driven by international prices, and it’s going to get worse. “It’s going to go up further.” Collins said he was speaking at an AA regional conference in Wellington on Thursday and is about to deliver this message:
“Pundits are picking it’s going to get to $140 to $160 per barrel by Christmas time.
“We could be seeing another 30 to 40 cents a litre or more. It’s going to get very uncomfortable.”
Russia’s invasion of Ukraine, a drop in production from Organisation of the Petroleum Exporting Countries (Opec) members, and sweeping Covid-19 lockdowns in China were creating “a perfect storm for prices to go up”, Collins said.
Our Government couldn’t do anything, he said, apart from continuing to minimise the fuel excise duty past August.
“It’s not just us; it’s Australia, it’s the UK, it’s most of Europe.
“There’s not a lot they [the Government] can do about it.”