Did our Part-time PM think we would forget her tax contribution to our being “fleeced at the pump” every time we fill up?
Ardern’s fuel tax was the first thing that popped into my head when she announced we are paying too much for fuel, which we already knew. Australians went apeshit last year when prices exceeded $1.60, they currently pay $1.33-$1.51 per litre when our best price exceeds $2 a litre. Mind you, Australians are allowed to drill their own oil and locally produce fuel. Granted it’s only 10% of their fuel needs, but we have been banned altogether and must rely 100% on imports.
Ardern promises to do something but what that is we won’t find out until December. If she was really concerned, she would have lifted the fuel tax before opening her mouth.
“A landmark report into the fuel industry by the country’s competition watchdog shows New Zealanders are being “fleeced at the pump”, Prime Minister Jacinda Ardern says.
The draft report into the $10 billion fuel industry stated that petrol companies appeared to have made “excess returns” for most of the past 10 years, with profits “persistently above the returns earned by comparable firms internationally”.”
Stuff
A smart person would have researched our 10 years of overpaid fuel prices before they slapped a new 11.5c a litre fuel tax on.
Road Transport Forum chief executive Nick Leggett agrees.
“If you look at our fuel costs compared to other countries in the tax take comparison our Government is doing pretty well competitively on that basis as well,” Leggett said.”
Newshub
Does the government get a decent cut of fuel sales and could, therefore, afford to stop applying the fuel tax?
“Just under a third of the pump price is the actual cost of refined petrol,” its website says.
“About 50 percent is tax, i.e. 63.784 cents per litre in fixed excise (not including the 10c Auckland Regional Fuel Tax), plus the Emissions Trading Scheme levy (approximately 6.2cpl) and GST (NZ has the sixth-lowest fuel tax in the world; in many OECD countries, taxes account for around two-thirds of the price).”
We’d all be screaming bloody murder if the government took 2/3 of the pump price in taxes. We already pay through the nose for petrol so if it’s not the taxes, it must be the lack of competition.
Currently, the central government takes 81.48c (excise, emissions and fuel tax) and Aucklanders pay another 10c, a total of 91.48c fixed taxes per litre, excluding GST.
In Auckland the price of petrol varies between $2.06 and $2.29 a litre, depending on where you live. Central city, Ponsonby and Newton demand top dollar according to my Gaspy app with West Auckland the cheapest. Gull are the cheapest and Z the most expensive.
The average price of fuel per litre is $2.175 which makes the GST component 1.93c. Add the fixed taxes of 91.484c and total taxes are 93.417c/litre on a sale at $2.175 per litre. That leaves an average 91.24c per litre to the fuel companies.
Because most of the fuel taxes are fixed, central and local government get their cut regardless of the sale price.
But the difference of 23c/litre in purchase price makes a big difference to us, the end-user, and means Ardern is right in addressing the monopoly because we will benefit more from competition bringing retail prices down than wiping off the 11.5c tax.
It would have been so much more palatable to the public if Ardern had addressed the lack of competition in the fuel market and then introduced the additional fuel tax on the back of a price drop from more competition. Why didn’t she?
Like most of the decisions made by the CoL, they lack foresight and planning, stumbling from one crisis to the next when their promises turn up empty.
We can’t wind back the clock on any of Ardern’s decision making but it is clear she is out of her depth. We shouldn’t have to wait until 2020 when she could easily put us out of our misery by stepping down earlier.
