Auckland regional fuel tax will raise millions per month but consumers will pay

Friday, 29 June 2018

Petrol stations within this area will pay the fuel tax.

Auckland Council is set to receive on average $12.5m per month from a fuel tax on all Aucklanders. But how will it be collected and spent and who will really pay the price?

Companies distributing petrol to consumers become liable for a regional fuel tax of 11.5c on every litre of fuel they sell in Auckland from July 1.

Mark Stockdale, spokesman for the Automobile Association (AA), said if previous fuel tax increases were anything to go by at midnight June 30 prices on display boards outside petrol stations would immediately jump up by 11.5 cents.

'They want the public to see the price increase is entirely due to a government tax imposition.'

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New Zealand Transport Agency will collect and administer the tax.

Auckland Council's manager of financial strategy, Michael Burns, said the council would start receiving an average of $12.5m per month from it via NZTA sometime before September 10.

SHOPPING AROUND

But Auckland's mayor, Phil Goff, says the price won't go up by 11.5c per litre at every pump as he expected some stations to absorb the tax due to competitive pressures.

'Right now I can go to a service station just outside the airport and pay 20 cents a litre more than the one in Manurewa,' he said.

'I think Aucklanders will be more inclined to shop around, they will be more inclined to use the coupons that they get at the supermarket.'

Larry Green, co-founder of the app Gaspy which monitors fuel prices through crowdsourcing, says people are already starting to do just that.

Gaspy had its biggest spike of users outside of its launch period this week with an average of 1000 new users every day since Monday.

'This is an unusual one for us because normally nobody tells anyone before the petrol price goes up.'

PASSING ON THE PRICE RISE

Stockdale says past fuel excise increases of 3 cents per litre were passed on to consumers on the day of the increase but the added GST component had sometimes been absorbed.

'There's always a little bit of flexibility.'

That could mean a price rise of 10 cents per litre instead of 11.5 cents but Stockdale says the amount added to the fuel price could also be rounded down to 11 cents.

Petrol companies usually steer clear of passing on commodity price rises on the day of a tax increase to make the cause of price changes clear for consumers, Stockdale says.

In one case, an excise increase had fallen in line with a change in global oil prices but petrol companies waited two days after an excise increase to change prices to reflect the oil price change.

'Let's say the commodity price went up two cents around the same time a three cent tax is due.

'If they did five cents on the day the public would say 'oh they're ripping us off'.'

STATIONS AT THE BORDER

If prices at the pump in Auckland do go up, drivers travelling to the city from the south or north on Sunday have several opportunities to fill up their tank without paying the new tax.

The regional fuel tax boundary runs south of Pukekohe and north of Port Albert, and the closest petrol station along State Highway 1 to the south not affected by the tax is Mobil Mercer.

Duty manager Gagan Singh says he's unsure if the station will see more business from Sunday but says it is 'possible'.

GAS in Pokeno is closer to the city but requires Auckland road users to hop off SH1.

GAS staff member Amar Khera hopes there will be more customers after the regional fuel tax comes in, but admitted: 'Some people don't know about it, they don't care.'

BP Bombay sits just a few kilometres inside the regional boundary.

BP spokeswoman Leigh Taylor says the Bombay station, along with all the 45 BP-owned and operated stations in Auckland, would pass the tax on in its entirety to consumers.

Auckland Mayor Phil Goff says he doesn't expect the fuel tax to hit all Auckland consumers equally.

Taylor says she wouldn't be surprised if stations such as GAS, in Pokeno, or Mobil in Mercer experienced a sales bump in the short-term.

For Auckland commuters travelling south Caltex Shamrock on SH1, a Mobil on SH12 and two petrol stations in Mangawhai Heads are the last petrol stations before the Auckland border to the north of the city.

Nicola Law, a spokeswoman for Z Energy, says had the tax come into force a day later on July 2, there may have been a larger number of customers lining up at petrol stations to fill up the day before.

She says petrol stations often experience a bump in business on Sundays as Aucklanders fill up for the working week or return home from trips.

But with the petrol tax coming in on a Sunday, many will have to change their routine to fill up on Saturday in order to avoid the tax.

TAX COLLECTION

Money from the tax will be collected by New Zealand Transport Agency, not Auckland Council or Auckland Transport.

NZTA will collect the tax based on monthly records of fuel sold to consumers as reported at every petrol station.

Law said the amount of fuel sold at Z was reported to NZTA every month anyway so no systems will need to change to accommodate it.

Some Aucklanders who use their vehicles on farms or 'off-road' will be able to claim rebates, according to a statement on NZTA's website.

'Where a person can claim a refund for fuel excise duty, they should also be able to claim a rebate for regional fuel tax.'

The $1.5 billion to be collected over 10 years from the tax will help fund the $28b Auckland Transport Alignment Project (ATAP), which includes rail, road, cycling and safety improvements.

It became possible for Auckland Council to levy a fuel tax after the passage of the government's Regional Fuel Tax Bill on Tuesday.

Auckland Council passed its 10-year budget before the legislation passed its final reading, with the regional fuel tax approved in anticipation of the bill's passage.

ANGER AT THE FUEL TAX

Aucklanders will pay 11.5 cents per litre more for petrol from Sunday.

National Party leader Simon Bridges has said his party will repeal the bill if they are elected to government.

Stockdale encouraged every Auckland motorist to fill-up at the pump on Saturday if they could as prices would likely go up on Sunday even if underlying commodity prices changed.

Green meanwhile is bracing himself for an increase in Gaspy app users next week as irate motorists start to search it for better deals.

The largest spike in users for Gaspy usually comes a week after price hikes were made as people begin to feel the price increase and hear about it in the media, he says.

'Next week it'll be an absolute cracker,' he added.

'People will be fuming.'