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30/5/2018 — Oil and Gas
Motorists pay dearly for fuel issues

The pot is being stirred by the National opposition over planned fuel tax increases while leading newspaper the New Zealand Herald has editorialised on issues raised by this tax and also the scope of collusion between fuel suppliers on pricing.

National Transport spokeman Jami-Lee Ross said increasing opposition from Aucklanders showed it was time Transport Minister Phil Twyford abandoned plans to invoke a fuel tax on Auckland.

Ross said 51% of the over 14,000 submissions to the Auckland Council on the regional fuel tax make the clear case Aucklanders do not want new taxes.

“Aucklanders have now told the Transport Minister multiple times that they do not want his new taxes, yet he arrogantly continues to insist he knows better. The Government has refused to look at alternatives to the regional fuel tax, like requiring the Council to follow through on its promise to find savings in its own budget.

“On Auckland Council’s own numbers, if they could find the 3-6% of savings Mayor Phil Goff promised a fuel tax would not be needed.”

“National remains committed to funding Auckland’s transport needs like Penlink, Mill Road, the City Rail Link and the Eastern Busway without resorting to new taxes,” he added.

An NZ Herald editorial yesterday said the oil companies' protestations that it's a competitive market out there are no more convincing now than they have ever been.

“The public perception remains that they sell petrol and diesel for what they think they can get away with, those who aren't served by a genuine competitor (Gull, or to a lesser extent independent service stations), subsidising those who are.

“Last week BP, Z, Caltex and Mobil generally seemed to have settled on a top price for 91 octane of 225.9 cents per litre. In Whangarei, Z and Mobil were charging 213 cents, Caltex 211 and Gull 209.

“The oil companies have a huge advantage over other retailers. We can't function without their product, and we can't buy it online. We have no choice but to pay their prices, however inflated they might be.

The editorial said purveyors of other products aren't always much better. People in places outside the main centres tend to pay more for everything from chickens to dog biscuits, in the name of cartage.

“Maximising profits, as the oil companies clearly do, is hardly illegal. Every retailer does that, but the major complaint, rightly or wrongly, against those who sell petrol is that they are in collusion.

“And that is illegal. It is difficult to believe otherwise when prices at the pump rise and fall by exactly the same margins at exactly the same moment.”

The editorial said fairly or otherwise, resentment over rising prices will eventually settle on politicians, not least because of the impact inflation has on the cost of living, which will inevitably affect interest rates and the ability of the economy to grow and provide Government with revenue it needs to pursue policies.

“The political response so far — an undertaking to demand an explanation from the oil companies for their price increases, and to some lesser degree perhaps regional variations, is almost as galling as the price rises themselves.

“Politicians never miss a chance to portray themselves as our friends and defenders, but have long treated service stations as an inexhaustible source of tax. And it's getting worse.”

Some politicians expect oil companies to display some sort of social conscience. To sell their product at a price that fairly reflects their costs and a modest profit. Why it would expect that would be a mystery to most, and somewhat disingenuous.

“Every time the price of petrol rises, so does the contribution it makes to Government revenue. We were told last week that at current levels, the Government was collecting $1 from every litre of petrol sold. That's somewhere around 45%, not a bad haul for a Government that would have us believe that we are being ripped off.

The Government is in the process of adding to its tax take at the service station.

The Auckland Council is about to add another 11.5 cents per litre within its boundaries. That roughly equates to the increase seen overnight earlier this month, an increase that politicians clearly suspect wasn't warranted, but which they have no difficulty imposing on their own behalf.

“Auckland mayor Phil Goff even has the cheek to expect the Far North to help pay for public transport in his city, and is happy to sock it to city motorists, then spends almost $1 million on a report, which he's not keen on anyone reading, for a $1.5 billion harbourside stadium. Perhaps that money would be better spent on 'No Swimming' signs for when it rains.

“And when it comes to doing business with a social conscience, Wellington is in no position to preach to the oil companies. The last National-led government presided over Air New Zealand's decision to stop serving a number of regional centres, including Kaitaia, because they weren't turning a profit.

“The current Labour-led government has allowed that practice to continue. And now we're told that the already exorbitant cost of flying within New Zealand is going to increase, because of the cost of fuel.”

Source: nzherald.co.nz

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Busy times on an Auckland motorway. Photo: Fairfax Media.