Petrol price puts heat on families

The average family's finances are over a barrel right now. With petrol prices hitting all-time highs since Hurricane Katrina damaged oil refineries in the Gulf of Mexico quenching the family car's petrol thirst has become a mainstream topic of conversation.

Most people struggle to save even $20 a week, New Zealand Institute chief executive David Skilling says.

But with petrol prices rising more than 25 per cent over the past year, even this option has gone.

And it's not just the poor who are feeling the pinch. Gas-guzzling SUVs and 4x4s favoured by the middle class now cost up to $100 to fill up.

The people hit most by the petrol price rises are those with no discretionary spending, says David Russell, chief executive of the Consumers' Institute.

Whether oil companies needed to pass on all of the increases to consumers was a question posed by Russell, noting the multinational oil companies had healthy profits.

Not so healthy are the wallets of many families. Budgeting services around the country have been hit with a spate of clients cancelling appointments because they simply couldn't afford the petrol to attend.

Raewyn Fox, chief executive of the New Zealand Federation of Family Budgeting Services, said one small rural service had four cancelled appointments in one morning this week for that reason.

Likewise the AA's Technical Advice Call Centre has been inundated with calls from cash-strapped motorists.

AA technical advice manager Jack Biddle says 21 per cent of all calls in recent weeks have been about running costs.

Another 53 per cent were from those wanting to buy another car - many of whom were concerned about fuel prices.

The increase in fuel prices is challenging our cash-rich, time-poor attitude to the car. About two-thirds of all car journeys are less than 2km - a distance that can be walked in less than half an hour by the average person.

As the parent of two pre-schoolers, I know all too well the temptation to drive a few hundred metres to avoid the mind-numbing barrage of "my legs hurt, can you carry me" complaints.

But a decent chunk of the population can cut car journeys by combining trips or sharing with others when they take the kids to cricket or go to the movies with friends.

About 40 per cent of morning peak-hour trips involve the school run and travel to educational facilities, says Auckland Regional Transport Authority walking school bus regional co-ordinator Sue Kendall. Fifty-three schools run more than 95 Walking School Buses in the Auckland region.

Trading your gas guzzler in for a greener car that uses less petrol may not be the money-saving answer you're looking for.

The AA and the budgeting federation believe the price of second-hand small cars is on the way up and this is backed up by Turners Car Auctions.

"In the past three weeks since Cyclone Katrina, the prices have firmed by about 5 per cent, which means that a lot of the larger cars are being passed in," says Graham Roberts, chief executive of Turners Car Auctions. Dealers and private customers are shunning six and eight-cylinder cars or 4x4s.

Drivers could save hundreds of dollars a year by turning to alternative fuel cars.

But the reality is that when you crunch the numbers, the cost of buying and maintaining them may not make them the saviours that cash-strapped drivers are hoping for.

Biddle says the hybrid Toyota Prius, which uses a mixture of petrol and electric power, will use about 2lt less fuel per 100km than an equivalent new car. But the $40,000 price tag means that the people buying them are more likely to have socially responsible motives than a great need to save $3 a 100km of driving.

Running a diesel-powered car can save money, but only if it's a newer model.

"With the retail prices, servicing intervals, performance and costs becoming similar, diesel has become popular," says Biddle. However, older diesel vehicles can be expensive to maintain.

Converting your car to LPG or CNG is an option, but one that the AA warns people to be wary about. Not all models of cars can cope with being run on these fuels and there is a lack of experienced experts to do the work.

But buying one that has already been converted and regularly maintained may be an option.

TWENTY WAYS TO MAKE FUEL GO FURTHER

* Shop around for cheaper petrol prices and take into consideration the value of points schemes from Fly Buys, the AA and credit-card providers. Take advantage of any discounts offered by supermarkets such as Pak'n Save.

* Relaxed driving can save up to 4 per cent in petrol, says the AA. Driving within the speed limit also cuts costs.

* Use the appropriate gear. Driving at 60km/h in third gear uses up to 25 per cent more fuel than doing the same in fifth gear.

* Leave the car at home. Car pool, walk, cycle or use public transport.

* If you have two vehicles, use the more economical one whenever possible.

* Check your tyre pressure and oil levels regularly and save yourself up to 3 per cent in fuel consumption.

* Don't buy higher octane petrol than you need.

* Remove your roof rack and anything else that can create drag.

* Write a shopping list to avoid last-minute journeys to pick up forgotten ingredients.

* Shop locally if it's economically viable.

* Buy online instead of driving to the local shopping mall.

* Spend money to save money by getting your car serviced regularly.

* Switch off in congested traffic. Modern cars do not need to warm up, says the AA.

* Minimise air conditioning by winding the windows down when you're driving. Air conditioning increases fuel consumption by up to 11 per cent. You can also park in the shade - and get away with running your air conditioning on low. Choose a light-coloured car that doesn't heat up so much in summer and save on air conditioning.

* Work out what you spend on petrol per kilometre by using your trip metre and dividing the number of kilometres driven on one tank compared with the price of filling up. Then compare this to public transport costs.

* Buy a fuel-efficient car if the numbers stack up for you.

* Think small. It might be cheaper to have a small car and hire a 4x4 for the handful of days a year when you need to tow your caravan.

* Take a holiday closer to home.

* Combine journeys and car pool.

* Negotiate to work from home for several days a week. 
www.aa.co.nz www.familybudgeting.org.nz http://hybridcars.about.com