Fuel prices are sitting at record levels across the country and I know many people here in Selwyn are starting to think more carefully about how and when they use their cars.
At the time of writing this column, the average price of fuel in New Zealand was $2.39 a litre. According to MBIE data, every litre of fuel sold in New Zealand includes $1.27 of tax (made up of emissions trading costs, petrol taxes and GST) – 52 per cent of the pump price. In Australia, excise taxes are closer to 40 cents a litre and fuel prices are significantly lower.
Despite the regional fuel tax in Auckland of 11.5 cents a litre, most South Islanders are still paying more than Aucklanders to fill up their vehicles. This state of affairs has shown clearly that regional fuel taxes do not work and it is alarming that the Government has left the door open for other regions such as our own to roll out their own “regional fuel tax” in the future.
That is why the National Party is taking the initiative and has lodged a bill in Parliament aiming to repeal regional fuel taxes within three months.
Aside from this, prices are still set to rise further because the Government is proposing three additional rounds of national fuel tax increases totalling an extra 12 cents a litre of fuel.
All of these additional fuel taxes imposed by the Government put pressure on the budgets of ordinary Kiwis.
With forecasts showing a further weakening in the New Zealand dollar, it is likely that pump prices will rise even further. Some commentators have predicted that our dollar could drop to 60 US cents from around 67 cents currently, which would add about 9 cents per litre to the cost of fuel here.