Petrol hike looms, but NZ prices ‘low’
Prices at the pump are set to go up following a tax hike tomorrow but New Zealand motorists still get one of the best deals on fuel in the OECD. Laura Walters reports.
Kiwis are so used to rising petrol prices they’ve probably forgotten another hike is coming thanks to a tax increase, but motorists should not get too revved up as New Zealand’s fuel prices are still among the lowest in the OECD.
In 2012, Transport Minister Gerry Brownlee announced the Government would increase petrol excise duty by three cents a litre on July 1 in 2013, 2014 and 2015. Road-user charges for people using diesel would also increase by an equivalent amount.
Major retailers Z, Mobil and BP are selling 91 octane for $2.209 a litre but motorists will be paying about $2.239 after the tax hike tomorrow. This will bring fuel prices close to their inflation-adjusted all-time high of $2.46 a litre, reached in 1981 in the wake the Iran Revolution oil-shock.
AA PetrolWatch spokesman Mark Stockdale said after tomorrow, Kiwis would be paying more than 56 cents a litre in tax.
However, New Zealand had the fifth-lowest petrol tax in the OECD, making it the eighthcheapest country out of 25, behind the likes of the United States, Canada and Australia.
New Zealand motorists were not ‘‘cash cows’’ for the government like road users in other countries, Stockdale said.
Excise tax on petrol and road-user charges went towards transport costs, including building new roads, road repairs, road-safety enforcement and public transport, which everyone benefitted from, he said.
On the downside, New Zealand drivers were still paying too much for fuel, Stockdale said.
New Zealand fuel prices are based on the international commodity price of oil, which has been rising due to the unrest in Iraq.
Iraq produces 3 million barrels of oil a day and the most recent crisis, caused by al Qaeda splinter group, Islamic State in Iraq and Syria (Isis), has the world worried about disruption to the global supply.
Stockdale said even though commodity costs had risen during June, retailers shouldn’t have lifted prices as the rising New Zealand dollar had offset the impact of the price rise.
‘‘There’s always room for them to absorb some small increases.’’