The Soap Box: What can we expect from Govt's fuel price inquiry?

Author
Barry Soper ,
Section
Opinion,
Publish Date
Tuesday, 4 December 2018, 6:30a.m.
Kris Faafoi and Prime Minister Jacinda Ardern.
Kris Faafoi and Prime Minister Jacinda Ardern.

COMMENT:

It's worth bearing in mind, when we complain about things like petrol prices, that we're a blip on the radar screen at the bottom of the Pacific, the next stop as the albatross flies is Antarctica.

In other words we're a hell of a long way away from our suppliers, so it should come as no great surprise that we pay a bit more than other, more geographically convenient countries, when we fill up the tank.

But our isolation also means we're a captive audience - and competition is the key to getting a fair crack of the whip.

The last inquiry into fuel prices, ordered by the then new Energy Minister Judith Collins, who knew a cause celebre when she saw one (think of crushing boy racers' cars that saw just one driven to the crusher), was a once over lightly affair that found little in the way of unfair pricing, unless you lived in Wellington or the South Island.

Just four energy companies took part in that inquiry when there are close to 20 retailers in New Zealand.

So striding on to the stage with her Commerce Minister Kris Faafoi, Jacinda Ardern told us what we already knew: that the Commerce Commission was going to have a fresh look at the oil companies' pricing, the margins that they charge at the pump compared to what they buy the product for and how they control unequal prices around the country.

Several weeks ago she said the motorist was being fleeced, so she'll be expecting that to be confirmed by the $1.5 million inquiry.

Ardern trotted out some interesting figures which left us with the feel bad factor. Since her extravagant language a litre of petrol's dropped by more than 30 cents, which in reality has more to do with international oil prices and the value of the dollar than what she said. But for premium fuel we're still the most expensive country in the OECD, whereas a decade ago we were among the cheapest.

There was a word that kept cropping up as she was talking about the cost of petrol, it was pre-tax, almost as if the government's not part of the equation when in fact a raft of taxes are responsible for around half the price at the pump. This "no new taxes" Government has of course given us the Auckland regional fuel tax and has added another dollop on to the existing excise tax, which it looks set to do next year and the year after.

If the commission finds, as the last inquiry did, that oil company pricing is above board and we're not being fleeced by them, will the Government then look at the taxes it's charging motorists for a fill up?

Our total tax on fuel is the sixth lowest in the OECD, the Prime Minister proudly proclaimed, which presumably was aimed at making us feel better. An answer wasn't forthcoming.

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