Thursday, 11 October 2018

At the petrol pump

You don't - for good reason - get much of a chance to quote reams of facts on the radio. So for those of you who were listening to my stint on the National programme's 'The Panel with Jim Mora' on Tuesday, here are the numbers on what's driven the rise in petrol prices this year.

Conclusion - roughly two-thirds of the rise is down to the increased cost of the imported fuel, which has been hit by both a markedly higher world price in US dollars, and a markedly lower New Zealand dollar against the US dollar. It's not down to a big rise in petrol companies' margins, which is the story being used to frighten the children.

Most of the rest is down to taxes, by the way, and even more so in Auckland. The numbers above come from MBIE's weekly petrol price monitoring which as MBIE says "assumes retail petrol price are uniform nationally. Auckland City has recently introduced a regional fuel tax that will increase fuel prices in the Auckland region. Our currently methodology does not accommodate regional prices or regional fuel taxes. We are developing a new methodology ... that will include regional retail price differences". Aucklanders can add 11.5 cents to the increase in taxes, meaning that, for them, tax increases have been of the same order of importance as higher import costs.

The MBIE data are a great resource if you'd like to keep tracking developments for yourself. There was also an excellent explainer on the Newsroom website from Bernard Hickey, 'Q+A: Are petrol retailers profiteering?' which provides a lot of useful background.

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