Source: Radio New Zealand
More than 90 percent of freight in Aotearoa is moved by road.
Increased fuel costs could drive some trucking businesses under, according to an industry association.
War in the Middle East has effectively closed the Strait of Hormuz, a vital shipping lane, meaning oil prices are volatile.
On Thursday, the price of oil again rose to more than US$100 per barrel.
The rise in oil prices could cause the cost of goods to rise as more than 90 percent of freight in Aotearoa is moved by road.
The New Zealand Trucking Association said fuel’s now overtaken labour as the highest cost for trucking companies. It said fuel now accounts for 30 percent of operating costs, up around eight to 10 percent from before the recent conflict in the Middle East.
NZ Trucking Association CEO David Boyce told Checkpoint the increase in fuel was concerning.
“It’s pretty tough out there… For some, this will be the straw that breaks the back, so to speak,” he said.
“But it’s a pretty resilient industry. There will be plenty that will hang on and hope that this is only a short-lived blip on the radar.”
Boyce said there has been a “wild fluctuation” in price, with diesel up 35 percent this week.
He said it won’t take long for the increase in costs to trickle down to consumers.
“Transport operators run pretty lean and mean on their pricing. There’s not much wriggle room for them to absorb costs, so they really have to pass it on to their customers straight away,” he said.
Boyce is confident we won’t run out of diesel, saying there was around 25 days supply of diesel in New Zealand, and another 29 days supply being shipped here.
“Assuming that supply that’s coming here is not interrupted or compromised, we’ll be covered. But if some of those ships get redirected or some untoward act happens, things could change quickly.”
Meanwhile, the Commerce Commission said it is ramping up its monitoring and scrutiny of fuel prices and will react to any pricing behaviours that are cause for concern.
Commissioner Bryan Chappel said the commission won’t hesitate to call out unjustified price hikes at the pump.
He said the commission would provide updates on retail fuel price movements and compare them with changes in the cost of importing fuel on its website.
Chappel said motorists should shop around and use tools like the Gaspy app to compare prices.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
