It’s true: motorists are being fleeced

… by the government.

Fuel retailer BP has decided to go public with a breakdown of the cost of the average litre of fuel. This information is available in pamphlet form in many of their service stations. Needless to say, the outcome is a surprise to no one… except possibly Jacinda Ardern. quote.

Newshub found glossy pamphlets explaining where the money goes at one of the nationwide chain’s stations.
According to BP:

37 percent is the cost of the product
2 percent is shipping
2 percent is the Emissions Trading Scheme levy, otherwise known as the ‘carbon tax’
44 percent is taxes, including excise duty, GST and ACC levies
15 percent is operating costs and margin.
“In New Zealand, taxes make up around 44 percent of the retail petrol price – the single biggest component,” the pamphlet claims. This isn’t including the 10c Auckland regional fuel tax, which itself generates another 1.5c in GST. end quote.

Oh, how delicious! There was Jacinda, a few months ago, telling everyone how she was going to order (yet another) enquiry into fuel prices, saying that the fuel companies are ripping off consumers. It turns out, to no one’s surprise, that the biggest component of the price of a litre of fuel is… tax. quote.

AA spokesperson Mark Stockdale said BP’s figures were fair, because they would be based on the average price BP had charged over the stated time period – July 1 to September 30 of last year.

“That’s actually quite fair to use the average fuel price. The AA doesn’t use the average fuel price – the price that we calculate the margin from is what we euphemistically call the ‘national price’. It’s sort of a high price – it tends to be the price that’s charged in Wellington and the main centres in the South Island.

“But the reality is there’s a lot of price discounting going on… where it wasn’t uncommon for service stations to be charging 20c a litre or below that national price the AA quotes.”

The Ministry of Business, Innovation and Employment tracks fuel prices closely, and its figures say importer margins are at around 29.5c a litre – almost bang-on the 15 percent that BP claims. end quote.

Shane Jones, however, has labelled BP’s move as cynical, and ‘corporate candy speak’. quote.

[…] if BP was so concerned about transparency it would have put the pamphlets out when leaked emails exposed the petrol industry’s pricing behaviour last year. end quote.

Shane Jones

BP’s figures give the tax at 44% and list carbon tax separately at 2%. Since it is just another tax, that brings the total disappearing into the government coffers to 46%. So, for mental arithmetic purposes, simply divide the cost of each fill in half to quickly estimate the amount the money you are paying the government.

Of course tax is the biggest component of fuel prices. This is why the fuel tax increases were disliked so much. Even though the additional taxes were specifically targeted for infrastructure projects, once those projects are completed, the fuel taxes will remain. Jacinda was just trying to get the matter out of the public eye by calling for a review. BP has put it right back in the public domain again.

Shane Jones may have labelled BP’s move as ‘cynical’, but presumably, this information would have come out into the open when the review had been completed anyway, so there is no harm in the public being aware of this ahead of time. Unless, of course, the review had been deliberately designed to come up with a different outcome. That can’t possibly be right though… our ‘open and transparent’ government wouldn’t do that…would they?