Drivers facing the $100 fill-up

Motorists are paying as much as $100 to fill their cars as the price of petrol soars to record highs.

In the wake of Hurricane Katrina, crude oil hit a high of US$70.85 ($100) a barrel last week before falling back to $64.10 ($90).

This saw New Zealand fuel companies push pump prices to $1.60 a litre for 96 octane and $1.55 for 91 octane.

Drivers of SUVs are being hit hard, with an industry survey in Australia showing 4WDs and V8s are three times more expensive to run than the cheapest car, a Hyundai Getz XL.

Mortgage broker Mike Pero's passion for V8s is well-known but it is becoming an expensive habit. It costs him more than $100 to fill his Holden Commodore and he believes many will begin looking at more fuel-efficient options. "It is definitely going to have an effect on larger-engined vehicles."

Motorists outraged by the price hikes have accused fuel companies of profiteering because of the speed of the price rises. But last month the AA said oil companies were not putting more than their usual margins on petrol sales.

The AA said motorists should drive more efficiently, service their car properly and combine trips to save cash.

High pump prices have prompted calls for the government to cut taxes on petrol sales. Recent price increases mean the government's GST take from petrol has jumped from 13c to 17c a litre. Its overall tax take from each litre is around 42 per cent of the retail price.

National's John Key has hinted he may consider a temporary cut in petrol tax if he becomes finance minister. But Labour has resisted such pressure, with money from petrol taxes allocated to roading projects.

The Greens say higher prices are necessary to persuade consumers to cut their petrol use, as the world copes with growing shortages.

Oil companies have defended profits. Nick Hannan, of Caltex New Zealand, said his company was unapologetic about its $43 million profit for 2004. This included a one-off sum from the sale of Caltex's interest in Rockgas.

In Australia, oil companies have been accused of gouging nearly $100 million from the pockets of consumers by increasing profits from refining oil, with a watchdog saying "something funny" is going on with pricing.

- HERALD ON SUNDAY