Petrol and diesel prices to increase due to biofuel mandate

The price of petrol and diesel will increase by a few cents next year as the government plans to force retailers to mix biofuel with conventional fuel.

Once set in stone, the mandate will reportedly stop 529,000 tonnes of carbon dioxide from being emitted each year, according to the Ministry of Transport’s research.

The mandate will come into play on April 1, 2023. Prices on petrol and diesel will increase by roughly five to ten cents per litre.

Despite being pricier, retailer Gull says biofuels will keep the internal combustion engine relevant in a future world dominated by electric cars.

“[The mandate] means the ICE keeps on running and we emit less carbon,” Gull General Manager Dave Bodger told NewsTalk ZB.

But because biofuels are more expensive than conventional fuels, Bodger says a mandate is one of the few ways to get consumers to use them.

“The thing is, biofuels have forever cost more than mineral fuels, therefore people need either a subsidy or compulsion to use them.”

The government is going down the mandate route.

“What we’re requiring is fuel companies to have a percentage use of biofuels, so in the mix having a particular percentage of biofuels,” Prime Minister Jacinda Ardern said on AM Monday morning. “[Prices] would depend on how they choose to implement that.”

Gull has been blending ten per cent ethanol into its premium fuel for 15 years. The company currently receives an exemption on the excise tax of their biofuel.

Not everyone is on board with what is essentially a compulsory price hike of an already expensive commodity.

“[The mandate] is pointless when the Emissions Trading Scheme can help us meet our targets anyway,” ACT’s Environment and Climate Change spokesperson Simon Court said.

“Once again consumers are footing the bill so the government can implement a costly but ineffective ideological policy.”

National’s transport spokesperson Simeon Brown is also critical of the mandate, especially as it comes into effect at the same time the cost of living is going up.

“Forging ahead with a biofuel mandate will only put that pressure back onto working families,” he said. “It is giving with one hand, and taking with another.”

The mandate will trickle down into the domestic aviation sector.

“Biofuels are the only practical option for reducing emissions from the aviation sector,” read a Ministry of Business, Innovation and Employment report.

“New Zealand will be able to achieve material progress on the path to net zero emissions, thereby contributing to global efforts to address climate change impacts.”