Source: Radio New Zealand
Diesel is more expensive to make than petrol but the impact of fuel excise tax usually conceals this. RNZ / Quin Tauetau
Diesel is now only about 20c a litre cheaper than 91 – even though 70c of the price of a litre of petrol is tax.
Data from petrol price monitoring app Gaspy showed that across the country, the national average reported price for 91 was $3.31 a litre, and for diesel it was $3.13. For 95, it has reached $3.51.
91’s price is up 37.67 percent over 28 days, while diesel’s is up 81.75 percent.
Gaspy spokesperson Mike Newton said diesel would normally be expected to be 70c cheaper than 91 because of the petrol tax, but it was only 20c. “The diesel drivers are definitely getting it worse because they’ve still got to pay their road user charges.”
Diesel is more expensive to make than petrol but the impact of fuel excise tax usually conceals this.
Billy Clemens, head of policy and advocacy at Transporting New Zealand, said diesel was usually the second-largest cost for its member businesses, after wages.
“It’s a cost that sits typically around 15 percent to 20 percent of overall costs…. And road freight’s pretty famously a pretty low margin game. So our members are in a position whether they can either pass those costs on or end up in a really difficult position with their business viability.”
He said about half the organisation’s members were likely to be using a fuel adjustment factor.
“That’s a surcharge, essentially. You might have a base freight rate, but you add on a certain surcharge based on how much the diesel price has increased over a set figure. If you’re a freight customer you might be seeing that in freight invoices coming through. That’s a sizeable cost on businesses right across the country, whether you’re in retail or construction or logging… there’ll be a real flow-on impact.”
Clemens said shortages were not widespread and seemed to be driven by demand patterns.
He said transport was about 15 percent to 25 percent of costs for businesses in the loggin industry, and up to 12 percent in grocery.
Simplicity chief economist Shamubeel Eaqub said his concern was more about the volume of diesel. Runing out of petrol could be annoying on an individual level but running out of diesel could have much larger consequences, he said.
Gaspy data shows that the cheapest 91 petrol is at Orams Marine Village – which caters to boats rather than cars, and where fuel is $2.96 a litre. Pukekohe Pak’n Save was next, at $3.08.
Newton said some of the factors that normally drove differentiation in pricing aroudn the country were not as relevant at present.
Previously, local competition had often driven certain regions to be cheaper than others. “It’s hard to know if tha still applies in the current environment because there are not a lot of discount days going on at the moment,” he said.
“In the past when you’ve got discount retailers operating in an area, they tend to drag the price for the whole area down. Then it comes down to remoteness and population density. Places that are off the beaten track and don’t have a lot of customers are going to have higher prices.”
Auckland’s Waiheke Island, for example, is recording prices near $4 for 91.
Newton said Mangawhai had been an area with cheaper prices recently. It had a new Gull station open about five months ago. “Often when a discount retailer opens up somewhere they have introductory pricing, NPD’s really well known for it. They’ll set really low prices for a f w months and often it just brings the price for the whole area down.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
