The cost of living continues to rise, with petrol set to increase by 29 cents per litre tomorrow. FLYNN NICHOLLS weighs up the ramifications and gets reaction from the petrol station forecourt.
Today is the last day for motorists to fill their tanks before the petrol price goes up, after a year and a half of government discounts.
In March 2022, the government cut the fuel excise tax by 25 cents a litre after the war in Ukraine caused the price of petrol to increase globally.
The government also reduced the cost of road user charges [RUC], a levy paid by drivers of diesel vehicles, by 36 per cent.
Both temporary discounts were extended multiple times, but on Saturday, they will end.
As of yesterday, the cheapest 91-octane petrol in the region was at Pak’nSave and Waitomo in Masterton at $2.31 per litre.
The increase is set to put more financial pressure on businesses, driving up costs for consumers as a consequence.
Farming contractor Andrew Tulloch of Tulloch Contracting said increasing fuel prices will significantly impact inflation.
“It’s a massive expense for us: some of our big machines burn 100 litres an hour,” Tulloch said,
“New machinery, parts, oil, and now fuel, it’s putting pressure on our customers because we need to pass those costs on.”
Tulloch said profits have diminished in the farming industry, with the price of lamb and milk decreasing.
“Farmers, our customers, have less income and more costs,” Tulloch said.
“Forestry has taken a downturn, we’ve had these cyclones, so the government probably won’t get the income tax take they want. They’re looking for other ways to get it.”
Automobile Association [AA] fuel spokesperson Terry Collins said the AA supported the discounts for alleviating some cost-of-living pressure, but they had to end at some point.
“Few people will be happy about fuel prices going up, but international oil prices aren’t currently at the highs they were when the tax discount was introduced, so that the impact will be lower.
“The fuel tax money that motorists pay goes into maintaining and improving roads, as well as other transport network investment, and we all know our transport network is in dire need of upgrades,” Collins said.
“The Government has topped up transport funds via other tax sources over the past year, but fundamentally the discount – which has equated to about $2 billion lost in tax income – isn’t sustainable long-term.”
Collins advised drivers to get to the petrol station sooner rather than later to avoid last-minute queues.
The diesel price will not increase because road excise for diesel is not paid at the pump. However, RUC, which has been discounted, will increase by 36 per cent.
Graeme Reisima, owner of trucking company Reisima Haulage, said the RUC discount period ending would add an extra cost for transport businesses that have seen prices increase across the board.
“Tyres, repairs, diesel additives have all gone up, now RUCs as well – that means we have to put our price up, which is what causes inflation,” Reisima said.
“There’s not much relief out there [for trucking companies] on top of an already tough year.”
Waka Kotahi NZTA has said it will not allow people to bulk buy discount RUC – diesel drivers must buy a full-price RUC licence by July 31.
A Waka Kotahi spokesperson said the transport agency will audit and back-charge RUC users for excessive RUC purchases during the discount period.
“If you bought too much RUC at the discounted rate and haven’t bought a new RUC licence by July 31, 2023, Waka Kotahi can send you an invoice to charge you the standard rate for all of the excessive RUC,” they said.
If a diesel driver holds a RUC license from 4000km to 5000km, and their odometer reading is 4250km, then before July 31, they will need to apply for a new RUC license with a start reading of 4250km; Waka Kotahi will credit back the 750km at the discounted rate.