Tax, rising commodity prices, falling dollar, fuel prices up

Media Release: 1 July 2013

PetrolWatch – June 2013

Tax increases, rising commodity prices and a falling dollar equal higher fuel prices
Fuel prices rose 4 cents per litre early in June, due to a combination of rising commodity prices and a falling exchange rate, and then petrol prices rose another 3 cents per litre on 1 July with the scheduled annual increase in petrol excise.

The price of 91 octane ended the month on $2.16 per litre in the main centres, while diesel climbed to $1.50 per litre at most service stations.

“With the latest tax increase, petrol prices are just 4 cents shy of the record high price in August 2012,” says AA PetrolWatch spokesperson Mark Stockdale. “Motorists are now paying nearly 94 cents per litre in petrol tax, including GST.”

Of the 94 cents, 53.5 cents is dedicated to the National Land Transport Fund which covers the costs of road repairs, road safety upgrades, road safety enforcement, public transport subsidies, and building new roads. Nearly 10 cents per litre is ACC levies for motor vehicle accidents, with 0.7 cents in miscellaneous taxes and the balance GST.

“No one likes paying more taxes, and motorists should try and cut their fuel bill by shopping around for discounted prices, or taking advantage of supermarket fuel dockets and loyalty discounts like AA Smartfuel. The AA has observed that there is a lot of regional price competition throughout the country at the moment, with some service stations charging less than $2 a litre for petrol,” Mr Stockdale said.

The AA’s monitoring of commodity prices and exchange rate movements shows the imported cost of petrol rose 3 cents per litre during June, and diesel 5 cents per litre.

“Much of that increase was later in the month due to the falling Kiwi dollar, which fell over 3 cents against the US dollar, but other than the tax increase the AA is not expecting retail prices to rise further. From the motorists’ point of view, a falling exchange rate is bad news, as a one cent fall equates to a one cent increase in fuel costs,” Mr Stockdale added.

• For more information, go to: www.aa.co.nz/petrolwatch

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