March 14 2022
Kiwi motorists will get some relief from soaring petrol prices, with the Government slashing fuel excise duties and road user charges by 25c a litre each from midnight.
High fuel costs have Bay people putting off visits to the doctor, delaying buying groceries, not taking their kids to school, and struggling to hold down a job, according to support services.
Others are filling up just enough for the petrol warning light to turn off.
On Monday, Prime MinisterJacinda Ardern announced that 25 cents a litre of excise tax would be taken off fuel and public transport fares halved, admitting there was a cost of living crisis.
The fuel changes took effect at midnight on Monday and the public transport changes will follow on April 1. They will last for three months at this stage.
While some said this would "absolutely" help, a mobile business owner said it was not enough and an economist said the move was at risk of being "swallowed up" by global oil price rises.
The Big Smoke BBQ mobile catering business has cut back areas it travels to due to the cost of fuel, food and staff costs.
Big Smoke BBQ owner Mike Jefferies. Photo / Supplied
Owner Mike Jefferies said the company travelled around the Bay of Plenty, Waikato and some of the Coromandel Peninsula, and it cost $300 to fill their tank.
He said the 25 cent tax cut was "not really enough" and three months was "a bit of a cop-out".
The company charged mileage but the cost of fuel was more than it charged and could change dramatically between the booking and event day.
"We quote weddings off the menu and mileage, and once people have accepted that, I can't really go back and say I have to adjust it upwards ... I've got to wear it," he said.
The cost of fuel also drove up the cost of ingredients, and they were already paying winter prices for vegetables.
Hamiora Taurima said his family, although "not in dire straights", made sacrifices around filling up the car.
He, his wife and two sons recently relocated from Maungatapu to Te Puke.
"Fuel prices will be the difference between necessities for the house and necessities for gas. If we need gas for my partner to get to work, then we wait to buy groceries until the next pay."
He said there were waiting lists for the preschools near their new house and they needed to travel to Poike and Maungatapu to get the kids to school.
He said they haven't been able to find a closer doctor yet either, and needed to travel to Welcome Bay and Fraser Cove for this.
He said fuel price was a "heavy consideration" around taking the kids to preschool with his wife going to work.
Hamiora Taurima (right) with his wife, Philipa and their children. Photo / Supplied
They've also considered carpooling with extended family to get all the kids into school.
Taurima said the drop in fuel tax was "reassuring" and would help, with every dollar saved important.
Alongside the fuel tax cut, Ardern announced almost 60 per cent of families will get an increase to Working for Families of an average $20.
Superannuation will increase by $52 per fortnight for a single person and $80 for a couple, and benefits will increase up to a further $35 a week, from April 1.
Tauranga Budget Advisory Services manager Shirley McCombe said people put off going to the doctor while others couldn't hold down a job because they had no car or couldn't afford gas.
She said people put just enough fuel in to turn the fuel light off and "cross their fingers and hope for the best".
"Our clients were struggling before the dramatic increase in housing, utility, food and now petrol costs."
She said the cut in fuel tax would "absolutely" help, and she hoped it would mean there was more money for food and power.
She said the other payment relief specifically helped clients on benefits and superannuation, the Work for Families helped those working, and tax cuts on fuel helped everyone.
She said not everyone struggling was on a benefit.
While the fuel tax cut helps, she believed there was more to do to relieve pressure on people.
Te Tuinga Whanau Support Services executive director Tommy Wilson said some mothers weren't taking their kids to school because they could not afford the petrol.
"When you've got to choose between a $10 cabbage at the supermarket and getting your kids to school, something has to give."
Te Tuinga Whanau Support Services executive director Tommy Wilson. Photo / NZME
He said 25 cents would make a "huge" difference for parents and the elderly, enabling them to afford to go to the supermarket, school, and appointments.
He said many Te Tuinga clients used public transport and halving the prices would be the biggest help.
Western Bay of Plenty economic development agency Priority One chief executive Nigel Tutt said fuel will stay at "historically high levels" despite the reduction and reduced public transport prices would provide an alternative.
The cost of living relief package was, in his view, prioritising the non-working over the working.
"My concern is for the working poor."
Priority One chief executive Nigel Tutt. Photo / NZME
Otago University research economist Dr Murat Ungor said the fuel reduction was short-term relief and there was a danger it would get "swallowed up" by global oil price rises.
"Inflation is rising and expected to continue doing so for a while due to both domestic and global factors."
Ungor said oil prices surged to US$139 per barrel in the last 10 days with fluctuations in the global market due to the situation in Ukraine.
Ungor said declines in real wages and the quickly rising prices for goods and services were concerning.
Z chief executive Mike Bennetts said it was committed to not making additional profits following the announcement.
He said before the change in excise duty took effect, almost 70 cents per litre was collected by the Government in fixed excise, and an extra 15 per cent GST.
He said the company expected that the volatility in the price of refined fuels would continue given the ongoing war in Ukraine.
Otago University research economist Dr Murat Ungor. Photo / NZME
A BP spokesman said it implemented the changes announced yesterday across the network before midnight.
The fuel companies said they reviewed their prices daily.
Gull NZ general manager Dave Bodger said the 25 cent reduction, plus GST, totalled a 29 cent reduction on petrol.
He said there was no noticeable demand yesterday following the changes.
