Adrian Blackburn: Strong case to end road-user charges for diesel vehicles

Opinion

At the end of this month officials will report to the Minister of Transport on the 30-year-old system of road-user charges (RUCs) for diesel vehicles.

The review was sparked by heavy-truck operators being ambushed last year with overnight increases. Whatever the truckers' grounds for unhappiness, the case has become overwhelming for scrapping charges on diesel cars.

Today's new diesels feature performance, economy, refinement and environmental friendliness. Swift advances in diesel technology have transformed these vehicles.

In Europe, with diesel and petrol roughly equal in price, half of new car buyers choose diesel. Most of these high-tech cars are either already available or could be sold here.

But the historical accident of light diesels becoming caught up in the clumsy road-user charges scheme has artificially held back sales. No official in 1979, when the scheme began, would have foreseen such astonishingly swift technical developments.

Even so, why today do light diesel vehicles cost not significantly less in RUCs than, say, six-tonne trucks?

How much the charges have distorted reality became clear in the recent AA EnergyWise Rally when seven diesels among the 59 competing vehicles used less fuel than the Honda Civic petrol-powered hybrid declared the overall winner.

But the only failure was in the distorting effect of the user charges, given that the overall award was based simply on cost. Even if the pump price of petrol and diesel had been the same, the diesels would have triumphed.

For example, the small VW diesel I drove over the four-day, 1641km course around the North Island, averaged 3.65 litres/100km, against the hybrid's 4.76 litres/100km.

The environmental cost for the VW - 95.58 grams of CO2 per km travelled. For the winning hybrid - 109.6g/km.

More telling perhaps was that over the entire fleet, the 31 diesels used on average 22 per cent less fuel than the 28 petrol vehicles.

The environmental potential is obvious. Our car fleet is elderly, a little over 12 years old on average.

If over a dozen or so years the current 9 per cent of diesels in that fleet were to rise even to the European average, our vehicle emissions would plummet. We'd would also save huge sums in overseas funds for fuel.

New diesel car sales have jumped eight-fold since 2004, and SUVs four-fold. And you don't have to pay a lot for a decent diesel. Hyundai's $25,000 Getz achieved 4.8 litres/100km in the EnergyWise Rally. Kia's diesel Rio, similarly economical, is $1000 more.

Now even cautious Toyota New Zealand has finally seen the future, offering two diesels for its top-selling Corolla.

Even Honda, whose local flag is firmly fixed to the hybrid mast, might be persuaded. And just wait for the diesel-hybrids now being readied by several manufacturers.

The case for a new deal is so clear the official review will probably suggest scrapping RUCs for cars. Instead excise tax could equalise fuel prices at the pump.

But perhaps the Ministers for Transport and the Environment could jointly add some boldness.

What if they agreed simply to a five-year moratorium on diesel taxes, leaving the current pump price advantage with diesel?

Alongside could be a scrappage bonus for cars older than 10 years, on condition of the replacements being significantly younger and more fuel-efficient.

The fuel-tax loss on what is now under 10 per cent of the car fleet would be partly offset in our stalled car market by GST earned on the extra new cars sold.

If light commercials were included, the savings for their small business owners would do as much to save jobs as pretty well anything suggested at the recent Job Summit.

* Adrian Blackburn is a life member of the New Zealand Motoring Writers Guild.