Businesses and consumers should prepare for increased transport costs as road user charge increases and Russian diesel sanctions take effect in February, says national road freight industry group Ia Ara Aotearoa Transporting New Zealand.
On 31 January, road user charges will increase by 36 per cent as the Government ends the Transport Support Package for RUC, fuel excise and public transport fares. Transporting New Zealand has released figures that show that a 45 plus tonne truck and trailer traveling 100,000km per year will pay an additional $21,000. With 93 per cent of New Zealand’s freight being transported by trucks, those RUC increases are going to be felt across the whole economy.
On 5 February, five days after the RUC increase, the European Union, G7, and Australia will impose aggressive sanctions on Russian fuel exports, in response to the ongoing illegal invasion of Ukraine. This is expected to cause significant logistical disruptions to the international fuel supply chain and drive diesel prices higher.
Transporting New Zealand says that New Zealand consumers won’t be insulated from these cost increases. “Unfortunately, we know these increased transportation costs will have a real impact on kiwi families”, says Transporting New Zealand Chief Executive Nick Leggett, “Data from Waka Kotahi shows that freight costs can make up more than 12 per cent of the cost of groceries alone.”
Transporting New Zealand is reiterating its call for the Government to maintain RUC, fuel excise and public transportation discounts until the CPI increases falls below 6 per cent. “We’re not asking for a permanent extension, but we don’t want to see cost pressures piled on while inflation is still roaring”, says Leggett. “The government was also wagering that fuel prices would fall significantly in 2023, but it’s now clear we aren’t out of the woods yet”.
“With ongoing international supply chain challenges and domestic inflation forecasts remaining high through 2023, it isn’t the right time for the Government to increase costs on households and businesses”.