Fuel tax ends motorists' good run

Fuel prices will rise tomorrow, ending a run of good fortune for motorists who have enjoyed price cuts of 8c a litre. Photo / Brett Phibbs

Fuel taxes are rising tomorrow, putting the brakes on a good run for motorists who have enjoyed petrol price cuts of 8c a litre since last week.

A 3c excise rise on petrol will mean a tax take by the Government of 3.375c after GST is added, and drivers of diesel vehicles face a similar average increase in road user charges, depending on vehicle weight.

Although oil industry minnow Gull has vowed not to raise its pump prices tomorrow, general manager Dave Bodger could not say last night how long it could hold the line, beyond noting it would have to pay the Government the extra 3.375c in the meantime.

Automobile Association spokesman Mike Noon was philosophical about the increases, saying that although nobody liked paying more taxes, they had been well-signalled and were at least being fully applied to roads and other transport needs.

That compared with the diversion to the Crown account, before a law change last year, of 18c of every 42.524c in excise duty collected on each litre of petrol.

All 45.524c of the new excise rate will go to the national land transport fund, as will a second increase of 3c a litre next year, and Mr Noon suspected there may be even more rises to pay for the Government's ambitious roading programme.

But his main concern for now was the Government's refusal to replace road user charges for light diesel vehicles with a similar fuel excise system to avoid the need for motorists to queue up at NZ Post shops and AA outlets to buy distance coupons.

An independent working party, which has promised to come up with a simpler road user charges system next year, recommended against a diesel excise, saying that would mean refunds on the 36 per cent of diesel supplied for off-road uses, mainly on farms.

Mr Noon said that figure should be turned on its head, giving the majority users of 64 per cent of diesel priority, leaving the others to fall in line to claim fuel refunds at the same time as GST rebates.

"We are talking about 20,000 farmers against the inconvenience of hundreds of thousands of motorists," he said.

Although road user charges will rise an average 7 per cent tomorrow, drivers of small diesel cars and other vehicles weighing up to ten tonnes will pay 10 per cent more.

Heavy truck operators will pay 3 per cent to 6 per cent more, but there will be no increase for truck trailers.

Road Transport Forum chief executive Tony Friedlander denied that meant the trucking industry would be subsidised by other road users.

He said it followed an acknowledgement by the road user charges working party that too much was being charged for trailers, which were more likely than other vehicles to carry empty loads, minimising damage to road surfaces.