Road lobby calls on Jacinda Ardern to cancel fuel taxes after Commerce Commission report

Jacinda Ardern needs to cancel fuel taxes in light of a report that found Kiwis are paying too much at the pump, a road transport lobbyist says.

A draft of a market study from the Commerce Commission released on Monday declared the market is "not as competitive as it could be".

"Our preliminary findings suggest that many fuel companies are earning returns on investment that are higher than what we would consider a reasonable return to be," commission chair Anna Rawlings said. 

"In our view, the problem is the lack of an active wholesale market in New Zealand."

The final report is yet to be released and the Government hasn't said how it will respond. Road Transport Forum chief executive Nick Leggett said that's not good enough.

"She's waiting until December for the full release of the report before she tells us if she's going to do something and I don't think New Zealanders are going to buy that," he told Newshub.

Leggett's suggestion is the Prime Minister cancel the fuel taxes Kiwis are currently paying. 

Fuel excise has risen since the current Government's term began and Aucklanders are now paying another 11.5 cents per litre for the regional fuel tax.

"If you look at our fuel costs compared to other countries in the tax take comparison our Government is doing pretty well competitively on that basis as well," Leggett said.

"So let's make it apples with apples Prime Minister."

The AA reports New Zealand's tax spend, around half the cost per litre, is lower than other OECD countries.

"Just under a third of the pump price is the actual cost of refined petrol," its website says.

"About 50 percent is tax, i.e. 63.784 cents per litre in fixed excise (not including the 10c Auckland Regional Fuel Tax), plus the Emissions Trading Scheme levy (approximately 6.2cpl) and GST (NZ has the sixth-lowest fuel tax in the world; in many OECD countries, taxes account for around two-thirds of the price)."

The Commerce Commission has made two suggestions to influence fuel prices: 

  • contractual freedom to make it easier for resellers to switch between suppliers
  • enabling wider participation in the main companies' joint infrastructure, including making it easier to share in their terminals