Fuel price assistance makes its way south

The growing pain at the pump looks set to fuel renewed drumbeats of discontent, like an action replay of last winter’s uprising from motorists. And the Government will again come under sustained pressure about its tax-grabbing ways on your fuel tank.

With pump prices charging north again, the spectre of another 4 cent hike in fuel excise per litre is fast closing in. It will take effect on July 1, even though the state coffers already take over $1 off every litre of petrol sold in New Zealand, when you factor in GST.

Then there’s the 10 cent per litre Auckland regional fuel levy, which has been spread across the country’s bowsers.

I was road-tripping in the North Island last week, fuelling up in Paihia where the pump price was a startlingly low $2.03. A day later, back home in Christchurch, the standard price per litre was $2.31.

How can there be such a wild regional price disparity between New Zealand’s second-largest city and a far-flung tourist town?

The Government’s much-vaunted fuel price inquiry tediously grinds on, with nothing to show for it. After urgently passing legislation last spring, which provided the Commerce Commission with enhanced powers to carry out a market price study, we haven’t heard boo.

On the bright side, the South Island looks set to finally benefit from the ‘‘Gull effect’’, with the plucky competitor confirming its much-awaited advance into the Mainland.

Several Gull sites will open in Christchurch later this year, with the company securing supply from the Timaru fuel terminal.

Its ongoing failure to access supply from Lyttelton’s terminal has kept Gull at bay for many years. Timaru has provided the breakthrough.

Alongside Gull, the Hamilton-based low-cost fuel supplier Waitomo has also confirmed its southbound expansion, with Waitomo fuel stops opening in Wellington and Christchurch later this year.

NPD’s growing presence in Christchurch in the past six months has certainly helped sharpen prices. The more players the better to help keep downward pressure on your fuel bill.

Beyond the consumer debate over fuel prices, the South Island could well set the stage for shoring up future gas supply, given OMV’s planned drilling campaign off the coast of Balclutha.

OMV is no tyre-kicking rookie – recently acquiring Shell New Zealand’s assets and operating the offshore Maui and Pohokura gas fields.

If the exploration and appraisal well drilling is successful, OMV’s drilling permits can be further extended to 2030.

Similar to the Canterbury Basin, the potential of the deep sedimentary rock of the Great South Basin has long been identified as a prime target for commercial volumes of hydrocarbons. The plunge in oil prices five years ago slammed the brakes on commercially viable prospecting.

When OMV made its presentation to potential partners last year, it estimated there could be 3.7 billion barrels of oil and gas in the regions it has existing permits for. The two basins off the South Island coast cover roughly 160,000 square kilometres – four times as big as the Taranaki basin. In its 16 years of operation in New Zealand, OMV has paid more than $1 billion in taxes and royalties to the Government.

Greenpeace and friends are enraged by the news. They have slammed OMV’s intentions as ‘‘disgraceful’’ and have ridiculed the Government’s posturing as a climate change leader.

But their brand of absolutism is delusional. The extraction and consumption of gas is destined to be a transitional fuel, worldwide, for many decades to come.

Growing energy demand modelling indicates that even if coal and oil production tails off, global gas use will have to increase by over 30 per cent, in the next 20 years alone, according to the International Energy Agency.

If New Zealand can continue grabbing a slice of that action, the royalties, the employment and the security of gas supply, as we transition away from the dirtier carbon emitters, we’d be mugs to pull down the shutters.

Threats by eco-activists with Greenpeace and 350 Aotearoa, who are planning ‘‘full-force resistance’’ in a bid to blockade OMV’s drilling programme, are just a sideshow for two-bit exhibitionists.

In the face of rapidly depleting gas reserves, with no new recent finds in Taranaki, going south is good news.

Growing energy demand modelling indicates that even if coal and oil production tails off, global gas use will have to increase by over 30 per cent ...