MEDIA RELEASE 8 Febuary 2022
Let's Talk About Petrol Prices
As the price of petrol heads towards three dollars a litre for Premium 95, the Motor Trade Association is asking motorists not to take any frustration out on the person behind the service station counter.
Media reported over the long weekend that 95 had hit $3/litre in Auckland, and is very close to that mark in Wellington.
MTA Energy and Environment Sector Manager Ian Baggott says it’s important to remember the bulk of the price drivers pay for petrol is made up of taxes.
“It’s understandable that motorists feel frustrated – for many people it’s the last thing they need right now,” Ian says.
“But don’t blame the petrol companies, and especially, don’t blame the person behind the counter.”
Many motorists don’t realise that the biggest chunk of the cost – 52% - is made up of taxes such as fuel excise duty, the emission trading scheme levy, and GST.
“Another 37% is made up of production and shipping costs.
“That leaves 10.6% as the wholesaler and retailer margin, out of which they have to pay staff and operating costs, leases, distribution and other costs.”
New Zealand imports a lot of our fuel either as refined product or crude oil and the price of this commodity on the international market is out of our control, Ian says. For example, crude oil prices increased around 25% between December and January.
“Covid 19 has also had an impact. As countries around the world open up after Covid restrictions, they are resuming normal bulk fuel buying, which puts them at the head of the queue.”
And Kiwis aren’t the only ones feeling pain at the pump – in Australia costs are approaching A$2/litre, but the tax component there is considerably lower.
“All indications are that due to the rising cost of crude and the weak Kiwi dollar, prices are likely to continue rising here,” Ian says.
“There is certainly a possibility that we will see $3/litre for 91.
“We would ask motorists to remember that to a very large extent, these increases are beyond the fuel companies’ control – so don’t give the attendant an earful when you’re getting a tankful.”