Petrol prices: New Zealanders react to temporary fuel tax cuts

Kiwis have mixed views about how the cuts in fuel excise duty and public transport fares will affect them.

To counter the rising cost of living, the government has temporarily pulled 25 cents a litre off its fuel excise duty and told the petrol companies to pass it on. That should be a saving of about $11 to fill a 40-litre tank and $17 for a 60-litre tank.

Fuel prices were already rising before Russia invaded Ukraine, which occurred on 24 February and quickly sent prices to over $3 a litre for regular 91. They are now the highest they have ever been in New Zealand, causing people to change how they live.

"Filling up last week was $200," one man, Dean, said.

"It limits us from visiting families and friends," Tema said. "[The reduction] will really help us in this crisis situation that the whole country's going through."

The excise tax reduction will mean a lot for Aucklander Regiane and her family.

" can buy some more things for the girls, more fruit, and some meals that are more healthy than just eating frozen vegetables," she said.

Another Aucklander, Alan, thinks the move is good but the 25 cents a litre might just get swallowed up by global oil price rises anyway.

"I think petrol prices will continue to rise with what's happening in Russia. But also the cost of living everywhere has just gone up so much. And I'm not sure the government has quite understood that yet."

In Christchurch, Luke Cairns thinks this spending could be more targeted to those who would benefit more.

"I don't think it's really the best choice. If it was really to [increase] lower incomes, it'd be better to put it into Working for Families or something."

Prices were cut at around 80 Gull stations overnight by 29 cents a litre - the 25 cent fuel excise cut plus GST - and general manager Dave Bodger said its 20 independents would be able to start reducing prices once they had a rebate of tax already paid on their latest fuel deliveries.

For those concerned about whether prices would really drop, Bodger said New Zealanders could count on them for it to happen.

"Most definitely. We've just got to work out with the government as to how that goes back up in three months' time so there's no undue panic at the bowser."

He was unsure whether the company had the rolling seven-day average fuel margin data in the form the government has requested so it can monitor profits, but wanted the requirement to apply not just to New Zealand's five importers but to all wholesalers and retailers.

Z Energy chief executive Mike Bennetts said the company would ensure there was no increase in its profit with the tax cut.

The company started bringing in the reduction form midnight, but pricing was localised so there would be inconsistencies across the country as the cut was being rolled out.

Yesterday, Mobil announced it would bring into effect changes immediately, cutting its prices across all grades of petrol.

The fuel excise cut will last for three months, that is until mid-June, during which the government will review the scheme.

The duty still paid on fuel is about 55 cents a litre. Then there is 35 cents in GST, and about 15 for the Emissions Trading Scheme.

If paying an arm and a leg for petrol hasn't been an incentive to try the bus or train, price fares might be.

Public transport fares across the country will be cut by 50 percent for three months, starting 1 April.

Aucklander Archie thinks people should give public transport a go, but not necessarily for financial or environmental reasons.

"Anything can happen on a bus. If you're a single man or woman you might find the love of your life on a bus. You might just enjoy not having to think and drive for once. Get your head down, read a book. Talk to people - what happened to talking to people on the bus?"

Nelson-based beneficiary advocate Kay Brereton said lower public transport fares were a "really good boost" and will help a lot of people, but the petrol price fall may not make a big enough difference.

"This will work if it impacts food prices as well, and food prices start to come down, because we've all watched them rising ... in part because of fuel."

Grey Power president Jan Pentecost would prefer higher superannuation increases rather than petrol price cuts, to give older people discretion in how they used any extra money.

The last couple of years have been a whirlwind of financial hits, according to a Tauranga budget adviser. A housing crisis, then Covid-19, then inflation, and now a war hitting the pump.

Bay Financial Mentors general manager Shirley McCombe said petrol was one part of cost of living troubles, but it was housing that loomed over everything else.

"When we see people who are paying such ridiculously high amounts for rent ... the money that's left over doesn't even stretch far enough for food. Never mind petrol."

The number of food parcels distributed by Auckland City Mission has quadrupled since 2016.