AA calls for petrol tax cut as price rises again

Petrol prices rose a further 3c yesterday, after the 5c rise a week ago.

This has led the Automobile Association to call for the next government to reduce taxes on petrol and scrap planned petrol tax rises. A further tax is scheduled for April - linking petrol tax to an inflation index - and another in 2007, the Kyoto carbon charge.

And the AA has given a warning to anyone considering getting a motorcycle to save a few dollars to "carefully weigh the increased risk to life and limb".

A modern small car has similar fuel efficiency but is up to 80 times safer than a large motorbike, says the association.

"A better option would be a bicycle, which is 10 times safer than a motorbike and gets you fit as well, while buses are the hands down winners on safety."

The price of petrol at BP, Caltex and Shell pumps is now $1.609 a litre for 96 octane and $1.559 for 91 octane, with some regional variations.

Mobil has slapped the extra 3c on diesel as well, bringing it up to $1.049. Gull has yet to move.

"Our aim is to hold off as long as we can," said Gull's New Zealand regional manager, Geoff Gillott.

"At this point I have no information that my costs have increased so I have no reason to increase my pump prices."

He said Gull sites around the country were "frantically busy" yesterday afternoon as competitors fell into line with BP, the first to move.

The main companies, which have not ruled out further increases, blame the latest rise on the international cost of refined fuel.

"The main issue is around supply and demand," said BP spokeswoman Diana Stretch. "As soon as the situation eases we will pass on the benefits."

Jackie Maitland from Shell said the oil company was working on "very, very low margins at the moment".

Last week's 5c rise did not "fully reflect the cost of the product we are buying".

AA said steadily climbing petrol prices last month reached a record $1.529 a litre in main centres for 91 octane on August 31, as oil companies anticipated high spot prices after damage to United States refineries by Hurricane Katrina.

Prices were tipped to remain high, and any other disruption to supply would lead to further volatility, the AA said.

Since January, GST has increased from 13c to 17c a litre, a windfall of 4c a litre for the Government.

On every litre of petrol there are taxes and levies of 64c, including GST, of which only 22.49c goes toward transport infrastructure and services.

The AA said motorists should consider both cost and safety when trying to save petrol. Those who travelled far could afford to spend more on energy efficient vehicles or alternative fuels, such as LPG.

Others could find that measures such as driving more efficiently, servicing the car properly and combining trips were more cost-effective.

Consumers Institute chief David Russell said motorists had been caught by surprise at the size of the petrol price increases over the last two months.

New Zealand, with the rest of the world, had to come to terms with finding alternative fuels and using petrol more sparingly.

"On top of that we have to keep a close eye on the oil companies to see we aren't being taken for a ride."

Petrol prices

* $1.609 a litre for 96 octane

* $1.559 for 91 octane

- BP, Caltex and Shell prices (some regional variations)