Region prepares for fuel tax
The Auckland Council is set to receive on average $12.5 million per month from a fuel tax on all Aucklanders but how will it be collected and spent and who will really pay the price?
Companies distributing petrol to consumers become liable for a regional fuel tax of 11.5c on every litre of fuel they sell in Auckland from tomorrow.
Mark Stockdale, spokesman for the Automobile Association (AA), said if previous fuel tax increases were anything to go by, then at midnight tonight prices on display boards outside petrol stations would immediately jump up by 11.5 cents.
‘‘They want the public to see the price increase is entirely due to a government tax imposition.’’
The New Zealand Transport Agency will collect and administer the tax. The Auckland Council’s manager of financial strategy, Michael Burns, said the council would start receiving an average of $12.5m per month from it via NZTA sometime before September 10. SHOPPING AROUND
But Auckland’s mayor, Phil Goff, says the price won’t go up by 11.5c per litre at every pump as he expected some stations to absorb the tax due to competitive pressures.
‘‘Right now I can go to a service station just outside the airport and pay 20 cents a litre more than the one in Manurewa,’’ he said. ‘‘I think Aucklanders will be more inclined to shop around, they will be more inclined to use the coupons that they get at the supermarket.’’
Larry Green, co-founder of the app Gaspy which monitors fuel prices through crowdsourcing, says people are already starting to do that. Gaspy had its biggest spike of users, outside of its launch period, this week with an average of 1000 new users every day since Monday. PASSING ON THE PRICE RISE Stockdale says past fuel excise increases of 3 cents per litre were passed on to consumers on the day of the increase but the added GST component had sometimes been absorbed. That could mean a price rise of 10c per litre instead of 11.5c but Stockdale says the amount added to the fuel price could also be rounded down to 11c.
Petrol companies usually steer clear of passing on commodity price rises on the day of a tax increase to make the cause of price changes clear for consumers, Stockdale says.
‘‘Let’s say the commodity price went up 2c around the same time a 3c tax is due. If they did 5c on the day the public would say: oh they’re ripping us off.’’ STATIONS AT THE BORDER
Drivers travelling to the city from the south or north tomorrow have several opportunities to fill up their tank without paying the new tax. The regional fuel tax boundary runs south of Pukekohe and north of Port Albert, and the closest petrol station along State Highway 1 to the ‘‘I think Aucklanders will be more inclined to shop around.’’ Auckland mayor Phil Goff south not affected by the tax is Mobil Mercer.
Duty manager Gagan Singh says he’s unsure if the station will see more business from tomorrow but says it is ‘‘possible’’.
GAS in Pokeno is closer to the city but requires road users to leave the highway.
BP Bombay sits a few kilometres inside the regional boundary.
BP spokeswoman Leigh Taylor says the Bombay station, along with all the 45 BP-owned and operated stations in Auckland, would pass the tax on in its entirety to consumers. Taylor says stations such as GAS, in Pokeno, or Mobil in Mercer could experience a sales bump in the short-term.
Caltex Shamrock on SH1, a Mobil on SH12 and two petrol stations in Mangawhai Heads are the last petrol stations before the Auckland border to the north of the city.
Some Aucklanders who use their vehicles on farms or ‘‘off-road’’ will be able to claim rebates, according to a statement on NZTA’s website.
The $1.5 billion to be collected over 10 years from the tax will fund the $28b Auckland Transport Alignment Project which includes rail, road, cycling and safety improvements. The fuel tax became possible after the passage of the Government’s Regional Fuel Tax Bill on Tuesday.