Question marks arise over ‘complex’ RUC cutbacks
Transport companies in North Canterbury believe cutbacks on fuel excise and road user charges will bring only small respite to an industry already struggling.
Firms have been absorbing the detail of the Government’s move, with transport operators slowly evaluating how beneficial it will be to their operations.
In response to growing concerns over living costs, Prime Minister Jacinda Ardern last week confirmed decreases of 25 cents per litre on fuel excise and road user charges for the next three months. There are 85 different categories across the road user charge levy system. Details on changes were expected to be ironed out over the coming days.
There is no fuel excise tax on diesel, with the Government instead collecting a levy through road user charges.
The complex framework of how road user charges were applied across the industry meant any relief from spiralling costs was hard to measure.
Kaiapoi logistics outfit Steve Murphy Limited (SML) believed the changes were more targeted towards regular petrol users, and cost benefits would be hard to quantify.
‘‘You can’t absorb it, you just have to pass it on,’’ managing director Chris Murphy said.
He said the recent period had been tough. ‘‘60 per cent fuel increase in 12 months . . . it’s pretty hard to recover that, especially when it escalates so quickly and in such short periods.’’
Transport Rangiora managing director Murray Pascoe said many operators were ‘‘hurting’’ and called for clarity on how road user charge relief would be implemented.
‘‘It will bring some relief, but some firms who do massive kilometres will probably reap the rewards.
‘‘Guys who are doing shorter kilometres . . . say a hire crane where the truck is sitting there for four or five hours on a job . . . you’re not going to save anything on road user charges.’’
Waka Kotahi NZ Transport Agency (NZTA) said things were ‘‘being worked through’’ and conceded the situation with Road User Charges was ‘‘complicated’’.
‘‘Waka Kotahi is working through the scenarios at present,’’ a spokeswoman said. Most contractors utilise fuel adjustment factors, but pricing them appropriately had been difficult due to the volatile nature of recent fuel costs, adding further strain. Fuel adjustment factors (FAFs) are variable fuel surcharges used by freight and courier companies to recoup costs for fuel increases at the pump.
Agricultural contractors are also crunching the numbers, and what it means, after skyrocketing costs over the past few months. B.A. Murray Ltd managing director Steve Murray welcomed the changes, but says it would not spell an end to surging fuel prices.
‘‘What you’re going to see is contractors having to adjust their prices to compensate for the extremes that we’re going through at that moment,’’ he said. ‘‘Has the Government assisted? Yes they have in a small amount by reducing fuel, but it hasn’t eliminated [the problems].’’
Local Democracy Reporting is Public Interest Journalism funded through NZ On Air.