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Fuel prices continuing to rise, Ardern says government not entirely to blame

Words: Zane Shackleton

by Matthew Hansen
February 8, 2022
Petrol pump close up view

Fuel prices. The bane of all motorists’ existence. 

Live in the Auckland region and unleaded 95 has exceeded $3 per litre at some stations. The nation’s capital is similar, with prices in Wellington nearing the $3 mark for a litre of 95.

A quick check of the price app Gaspy this morning and unleaded 91 is catching up at a fast rate. 

Greenlane’s Z station opened its pumps Tuesday morning with 91 priced at $2.89 per litre. Even discount retailers like Gull are no longer ‘discount’, with their Auckland prices sitting at $2.59 per litre.

But experts warn the worst is yet to come. The cost of importing fuel is skyrocketing, forcing Kiwi retailers to push their prices up. A barrel of crude oil surpassed US$90 last week for the first time since 2014.

Waitomo Group managing director Jimmy Ormsby told NewsTalk ZB he was “bullish” New Zealand pump prices would continue surging for the next six months. 

But the government says it is not entirely their fault people are paying more for fuel each week.

Prime Minister Jacinda Ardern agrees fuel prices are too high. She says the government will not get in the way of making the issue worse. Instead, Kiwi pump prices will reflect global crude oil rates.

“Cutting healthy spending is not the way to resolve the issue of inflation that we are seeing many of our counterparts experiencing as well,” Ardern told NewsHub’s AM show.

The price consumers pay at the pump include several taxes and levies. These roughly make up $1.20 per litre. A 2018 tax of 10 cents per litre at Auckland stations racked up $515 million as of December 2021. Yet council data suggests they have spent less than half of that.

Still, Commerce Minister David Clark supports Ardern’s claims, emphasising record fuel prices are primarily caused by a supply and demand issue. 

“The government recognises that petrol prices are high,” Clark told the Spinoff. “However, this is largely due to increases in global crude oil prices, which have been experienced the world over.”

Clark also suggested high prices are not down to petrol companies taking larger profit cuts.

“It is not necessarily indicative of retail fuel margins or anti-competitive behaviour in the sector.”

Despite prices on the rise, demand for fuel will remain essentially unchanged. 

Automobile Association’s (AA) principal advisor Terry Collins worries what this could mean to families and individuals living on a week-to-week budget.

“People just have to travel, and there are many people that just don’t have access to good public transport or alternatives,” he said.

“If they’re on a budget and they’re paying for fuel, something else has got to give to make them pay for it.”

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