ZB

Cost of importing petrol hits a record new high

Author
Jenée Tibshraeny, NZ Herald,
Publish Date
Mon, 20 Jun 2022, 6:19pm
The cost of importing petrol to New Zealand hit a fresh record earlier this month. (Photo / NZME)
The cost of importing petrol to New Zealand hit a fresh record earlier this month. (Photo / NZME)

Cost of importing petrol hits a record new high

Author
Jenée Tibshraeny, NZ Herald,
Publish Date
Mon, 20 Jun 2022, 6:19pm

The cost of importing petrol to New Zealand hit a fresh record earlier this month, according to the latest data collected by the Ministry of Business Innovation and Employment (MBIE).

Importers paid $1.63 per litre for 91, and $1.66 for 95, in the week to June 10.

These prices were a couple of cents above the previous record high, reached a month prior.

They were also around 25 cents above what importers were paying in March, when the Government decided to ease costs for motorists by temporarily slashing the petrol excise duty by 25 per litre, and road user charge by an equivalent amount.

The Government, at the May Budget, announced the duration of the three-month fuel tax cut would be extended by two months.

This means the petrol excise duty discount is due to be dropped in August.

Prime Minister Jacinda Ardern wouldn't say whether the Government would extend the discount again, when asked about the matter on Monday afternoon.

But she made the point the discount is, at this stage, due to end at the same time a $350 "cost of living" cash payment is being made available to those who earn less than $70,000 a year and don't get the Winter Energy Payment.

"We really thought about the sequencing of those two things," Ardern said.

"But we'll continue to monitor what's happening in the market at the time of those decisions."

The five-month long fuel tax cut is expected to cost taxpayers $585 million.

The average price motorists across the country paid at the pump in the week to June 10 was $3.15 per litre for 91, and $3.32 for 95.

Average prices were higher just before the tax cut kicked in, in March, at $3.21 for 91 and $3.39 for 95.

However, prices surpassed these levels last week, in Wellington at least. Petrol prices in Auckland are above the national average, because Aucklanders are charged an additional regional fuel tax.

AA motoring affairs principal policy adviser Terry Collins couldn't see the cost of importing petrol falling any time soon.

He said sanctions on Russian oil exports, and reduced oil supply in Libya due to internal conflicts, were among the issues putting upward pressure on oil prices.

Collins also noted demand for oil from China is due to rise once the country relaxes its Covid-19 restrictions.

He said oil inventory levels are low around the world. What's more, investment in oil and gas exploration and production is waning, as governments around the world look to cleaner energy sources.

Ia Ara Aotearoa Transporting New Zealand chief executive Nick Leggett is urging the Government to extend the fuel tax cut.

He said 93 per cent of New Zealand's freight travels on the back of a truck.

"The reality is that half the Government's $27 per week cost of living payment will be wiped out immediately if people are having to pay an additional 25 cents per litre on fuel," Leggett said.

"Removing the RUC reduction to the trucking industry would also raise the cost of everything we buy in the shops, easily wiping out the other half."