The public ‘being fleeced’ by petrol companies, duped by Ardern

Following rising petrol prices and rising rhetoric from Simon Bridges and others, Prime Minister Jacinda Ardern has said that she thinks consumers are being fleeced by petrol companies.

She says that the Government is ‘prioritising’ an urgent amendment of the Commerce Amendment Bill – to do market studies that might eventually say something like petrol prices have been higher than the should have been for years.

NZ Herald: ‘Consumers, in my book, are being fleeced’ – PM Jacinda Ardern on petrol prices

National Leader Simon Bridges has been critical of the Government and its fuel taxes which he said is pushing the price of petrol up.

“Unlike petrol, talk is cheap. And the Government is a big part of the reason why petrol prices are so high.”

Petrol prices are creeping up to $2.50 in some parts of the county.

In response:

Prime Minister Jacinda Ardern has launched a scathing attack on fuel companies, telling reporters she thinks “consumers are being fleeced” at the petrol pump.

“I am hugely disappointed in the level of price that consumers are currently paying at the pump for fuel,” she said at her weekly post-cabinet press conference today.

Ardern came out swinging, pointing the finger at fuel importers – such as Z Energy, BP, Mobil and Gull – and their margins.

“Between 2008 and 2017, the margins importers were taking for themselves more than doubled from 7 per cent to 16 per cent.

“That increase represents a transfer of wealth from petrol consumers to producers, to the tune of hundreds of millions of dollars a year.”

Between October 2017 and September this year, petrol prices have risen 39c – Ardern said just 6.8c of this was tax.

But 9.8c of that was down to the margin from importers, she said.

“I do not see that as acceptable.”

In fact, she said that pre-tax, New Zealand has the highest cost for fuel in the OECD. In 2008, New Zealand had some of the lowest.

Given the concerns about “anti-competitive behavior” in the fuel market, the Government has prioritised the passing of the Commerce Amendment Bill.

This bill would amend the Commerce Act to enable the Commission to undertake market studies.

Once the bill is passed, Energy Minister Woods has signalled that she intends to ask the Minister of Commerce and Consumer Affairs Kris Faafoi to request the commission to conduct a market study into fuel markets to better understand how the market is functioning.

Ardern is anticipating the bill to be passed in two weeks’ time.

The study will report back next year, and the Government will prioritise a response to what the Commerce Commission finds.

So an urgent amendment to initiate a study that will report back some time next year.

Another bloody Government inquiry on something they say is a priority requiring urgency. We have been paying increasing petrol prices for how long?

Bridges said the Government should axe its fuel tax increases to provide immediate relief to motorists.

“[Ardern] is saying consumers are being ‘fleeced’ while her Government is driving up fuel prices and taking hundreds of dollars from Kiwi households through higher taxes on fuel.

“The [Commerce Commission] inquiry will take months and any resulting changes could be years away. Meanwhile New Zealanders are paying record prices for petrol and the Government is collecting hundreds of millions of extra tax [dollars] from them.”

We are reminded of petrol prices whenever we fill up our vehicles, so this could be an effective line of attack from the Opposition.

Hamish Rutherford (Stuff): If the Government is so certain motorists are being fleeced, what is it waiting for?

Prime Minister Jacinda Ardern is convinced that Kiwis are being “fleeced” when they pay for petrol.

“As a moral stance, I think New Zealanders are paying too much,” Ardern said.

With motorists paying close to $2.50 a litre for petrol in many parts of the country, it is understandable that the issue is back in the headlines, and that the Government wants to be seen to be taking action.

The problem is, the action being taken is to ask the Commerce Commission – effectively the referee on whether consumers are being ripped off – to investigate. These studies tend to take around a year.

If Ardern is already convinced that a rort is taking place and Energy Minister Megan Woods believes the market is “broken” as she said in May, why are they bothering to investigate?

This has been an issue for years – and that means under the last Government as well.

Simon Bridges also criticised Ardern for announcing “yet another inquiry”, when for years National failed to give the Commerce Commission the teeth it needed to investigate a market it also believed was flawed.

Had it acted earlier, we may be closer to a definitive answer.

But the Government’s urgency has a rich irony. Ardern has described climate change as New Zealand’s “nuclear free moment”.

Her Government seen fit to crack down on the oil exploration industry, ending new offshore permits, purportedly as a means to take action.

But the reason the climate is warming is not because fossil fuels are being extracted, it is because people are burning them.

If Ardern was really serious about tackling the issue, surely she would do something about demand.

But that is a probably subject to some sort of ongoing process or inquiry too.

Ardern is fiddling while petrol prices keep burning consumers in their wallets and purses.

Leave a comment

59 Comments

  1. Bill Brown

     /  October 9, 2018

    Petrol in Auckland has been suggested to maybe rise as high as $3 a litre

    Anyone getting the bus ? Hardly the uptake they want

    Worldwide diesel is being banned or at least dropped in favour of petrol hydrid

    Just tax tax & more tax

    Reply
    • Blazer

       /  October 9, 2018

      For those who don’t understand…rising international fuel prices and a weakening NZ $ are the main factors by…far.

      Reply
      • Corky

         /  October 9, 2018

        And government taxes, Blazer.

        Reply
        • Blazer

           /  October 9, 2018

          every Govt raises levies…no exceptions.

          Reply
          • Gezza

             /  October 9, 2018

            I know. It’s infuriating. Taxation by stealth. I blame the government.

            Reply
          • PDB

             /  October 9, 2018

            Blazer: “every Govt raises levies…no exceptions.”

            You are being dishonest in not telling the full story – this govt has given passage to fuel tax increases at a speed & jump not seen by previous govts whereby they are already close to the full amount applied by National in their whole 9 years.

            A big part of it is this govt has allowed Auckland Council to implement a regional fuel tax (one which is being subsidised by people outside the region) which will open the door to other Councils doing the same thus further increasing prices.

            Reply
            • Blazer

               /  October 9, 2018

              you are being dishonest in speculating about what may or may not happen…in the future.

            • PDB

               /  October 9, 2018

              You are being naïve in thinking no other council will take up a fuel tax if it means more money for them to waste.

  2. Strong For Life

     /  October 9, 2018

    Will this study be like the one Ms Woods conducted into the electricity industry? She promised action then about soaring power increases and profits. Eventually, the conclusion was that electricity companies were not making excessive profits and we have heard no more.

    This is just another time-wasting stunt from this all talk and no action government.

    Reply
  3. David

     /  October 9, 2018

    They should never have let Z buy Caltex, just a dumb move.
    The Auckland petrol tax for a daft tram that will run alongside the brilliant Waterview should be scrapped and the tax taken off petrol. Of course it was going to leak and be paid by motorists everywhere else given there is some competition in Auckland thanks to Gull.
    And since when did we morph into a country that determines private sector margins.

    Reply
  4. Blazer

     /  October 9, 2018

    ‘National should never have let Z buy Caltex, just a dumb move.’

    Trying to create monopoly is the aim of the Capitalist game.

    Reply
    • Gerrit

       /  October 9, 2018

      …trying to create state owned and controlled monopoly is the socialist game.

      Reply
      • Blazer

         /  October 9, 2018

        Even democratic Govts have a monopoly on government.

        Reply
        • Pink David

           /  October 9, 2018

          Technically, the whole idea of a federal system is to prevent a monopoly on government.

          Reply
          • Blazer

             /  October 9, 2018

            Agreed ,but the over riding factor is …’who has the gold/money.

            Reply
  5. Herald editorial: High petrol prices call tax into question

    Right now the price is very high — around $2.40 a litre for 91 octane — and the National Party clearly senses public resentment is building. National has calculated that the Government’s 3.5c increase in petrol excise this month means the average household is paying $200 a year more in petrol taxes than it was last year.

    The Government has scheduled an increase in the petrol excise over each of the next two years and it has allowed the Auckland Council to levy an additional tax on petrol sales in its region.

    The council’s additional 10c a litre, on top of the Government’s take, was introduced in July with remarkably little complaint.

    But it would be unwise of the Government to believe the public’s tolerance of rising petrol taxes is unlimited.

    …The Government would be wise to take heed, tolerance of petrol taxes may be reaching the limit.

    A lot may depend on whether anything substantive comes out of the inquiry, and whether fuel prices are still an issue in 2020.

    Reply
    • Gerrit

       /  October 9, 2018

      And a scathing Stuff editorial as well

      https://www.stuff.co.nz/business/107693534/if-the-government-is-so-certain-motorists-are-being-fleeced-what-is-it-waiting-for

      “If Ardern is already convinced that a rort is taking place and Energy Minister Megan Woods believes the market is “broken” as she said in May, why are they bothering to investigate?”

      The comments following the article show the people are not that pleased with Ardern.

      From Guvner

      “This government was voted in by people that thought there would be a better deal for lower paid workers, students, beneficiaries and superannuants but already they including myself are worse off what with all the crazy fuel pump prices, higher food and transportation costs and a freefalling currency and as for the cancellation of further oil and gas exploration permits this crazy coalition government has only done this to portray themselves as climate change heroes without thinking about the consequences.”

      Reply
      • Blazer

         /  October 9, 2018

        Guvner’ is clearly not very bright.
        He does not understand what drives the economy.
        External factors are the biggest influence whether its the price of oil ,the milk solids price or any other commodity coupled with the gambling casino of forex fluctuations.

        Reply
        • Kitty Catkin

           /  October 10, 2018

          I looked up the generous rises to WINZ payments….the lucky ones have been given 1%. The rest nothing or an amount that couldn’t buy a Moro bar.

          Reply
  6. Reply
    • Missy

       /  October 9, 2018

      Is there evidence to back this claim up? or has the PM just said it to make her point? I would like the Government to show the list of pre-tax costs of petrol in the OECD so we can actually see the comparison with other countries, we shouldn’t be expected to take this on blind faith.

      Reply
      • Blazer

         /  October 9, 2018

        1+1=2…one company owns…Caltex,BP and Z(OLD SHELL),they set the prices.

        Reply
        • Missy

           /  October 9, 2018

          Stop trying to divert to something that is unrelated to my comment.

          Do you have a list of what the pre-tax cost of petrol is in each of the OECD Countries? If not you have no evidence to back up what the PM said and your comment is irrelevant.

          Reply
          • Blazer

             /  October 9, 2018

            how can it be irrelevant…the factors that determine price are …relevant.

            Reply
            • Missy

               /  October 10, 2018

              It is irrelevant because it gives no comparisons showing actual costs of ore tax petrol I. oECD countries, so in no way can provide evidence of the PM’s claims. I am interested in seeing the comparative costs in $ terms across the OECD of pre tax petrol – you haven’t provided that so irrelevant to what I was asking for.

          • Blazer

             /  October 9, 2018

            TS

            Clive Macann 4.1.1.2
            9 October 2018 at 9:13 am
            Very funny, BM, an extremely Nats biased comment.
            Facts.
            NZ fuel tax is around about 1/2 the cost.
            NZ is the 6th lowest taxed fuel in the OECD.
            Most are around the 2/3rds mark.
            Based on a wages comparison, fuel is cheaper now than in the early ’70’s.
            Also cars are way more fuel efficient that back then.
            Petrol is $2.05 outside my gate in the middle of nowhere.
            ChCh is around the $2.50 mark.
            Considering that the tax is pretty much the same on both,
            it is the fuel supplier grabbing the extra 45c mark up.
            Adhern is right.

            Reply
        • Gerrit

           /  October 9, 2018

          So which company is that than?

          And if Z was so profitable why did the Superfund reduce that stock holding to just 1.5% when the revenue stream in 20-16 was massive (500% ROI over 6 years)?

          ” Over the last six years, Z Energy had grown into a strong, dynamic listed company.
          The NZ Super Fund initially invested $209.8 million in purchasing Z Energy, alongside Infratil, in 2010.

          The Super Fund has now received $1,094 million in proceeds from the investment. The fund’s remaining 1.5 per cent stake is worth $47 million.”

          https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11649275

          Invest $200M, receive $1000M in proceeds over six years…then sell the stock?

          Someone know something back in 2016?

          Also worth a read for reference

          https://www.stuff.co.nz/business/92456640/new-zealands-largest-petrol-company-says-margins-are-top-of-cycle

          Reply
          • Blazer

             /  October 9, 2018

            smart managers cash up and invest the proceeds in other assets Gerrit.
            Great return when as your link says margins were at their top end range.

            Reply
  7. Reply
    • phantom snowflake

       /  October 9, 2018

      Incidentally, in the background of the photo is one of two 10-storey apartment buildings currently under construction in Glen Eden. (West Auckland) The development will include 90 units for social housing administered by an Australian (!!) social housing provider.

      Reply
  8. I hope Ardern proves Hooton wrong, but it seems like it will take months to find out.

    Reply
    • robertguyton

       /  October 9, 2018

      Hooton’s consistently wrong. No one needs to keep proving that.

      Reply
  9. robertguyton

     /  October 9, 2018

    “Minister Shaw has astutely focused his Zero Carbon bill engagements near-exclusively at the powerful, not at the householder. The same tactic was used to introduce the new fuel taxes.”
    TS

    Reply
  10. The Opposition is opportunistic and hypocritical, but are hitting the Government on a vulnerable issue.

    Reply
    • Corky

       /  October 9, 2018

      About time.

      Reply
      • Blazer

         /  October 9, 2018

        feel free to ask me how you can save on fuel Corky…its not rocket science.

        Reply
        • Corky

           /  October 9, 2018

          How can I save on fuel, Blazer? Sock it to me!

          Reply
          • Blazer

             /  October 9, 2018

            1- drive less
            2-don’t accelerate too quickly
            3-lets say ,you use $40 a week in fuel…get a smartcard ,put $40 worth in on the biggest discount day at a station nearby that has competition and save the points…10 c…do this the following week another 10c and again a 3rd time=30 c…then 4th week fill up and redeem the points…55l x 30c =$16.50 saved=under $36 as opposed to $40 amortised over your fills.Keep rolling it.
            d- link your card with supermarket discounts on fuel for more savings.

            I use this method and the savings negate the recent rises in fuel costs.

            Don’t mention it.

            Reply
            • Corky

               /  October 9, 2018

              Damn..not bad.

            • Blazer

               /  October 9, 2018

              minor correction ..you also receive 10c on the 4th fill=55 l x40c = $22 saved.

        • david in aus

           /  October 10, 2018

          Run behind a taxi. You save more than running behind a bus.

          Reply
          • Gezza

             /  October 10, 2018

            Logic fail. Running behind anything doesn’t mean you saved more than running behind anything else.

            Reply
            • david in aus

               /  October 10, 2018

              No way. I saved $200,000 today when I decided not to buy a BMW and stuck with my current car. A penny saved is a penny earned.

              I shared my wealth secrets. Your welcome.

            • Gezza

               /  October 10, 2018

              You idiot. You could have saved yourself even more if you just always ran behind someone else driving a car like your current one.

            • Kitty Catkin

               /  October 10, 2018

              DinA must be thinking of the old joke about the Scotsman telling his wife that he saved 6d by running home behind a bus, only to be asked why he didn’t save 10/- by running home behind a taxi 😀

  11. NOEL

     /  October 9, 2018

    Reply
  12. Pink David

     /  October 9, 2018

    Isn’t high petrol prices the whole bloody point? This is part of achieving carbon zero isn’t it?

    Reply
    • PDB

       /  October 9, 2018

      Yes – this is exactly what they were told would happen with their policies and they then turn around and say it isn’t their fault.

      The irony of course is that we are paying more petrol tax but less money will be spent on our roads.

      Reply
  13. Alan Wilkinson

     /  October 9, 2018

    Let’s ban oil exploration, pile taxes on petrol, increase ACC charges, increase the minimum wage, increase maternity leave, empower trade unions and drop the NZ$.

    Petrol prices rocket? Blame the petrol companies.

    Reply
    • Blazer

       /  October 9, 2018

      you never get tired of showing your ignorance of economic drivers Al.


      ‘drop the NZ$.’…NZ has a floating exchange rate influenced by the positions forex gamblers take.It is the 10th or 11th most traded currency in the world.Another bankers construct.

      The barrel price of crude oil is subject to supply and demand.

      These are very basic paradigms.Please learn them.

      Reply
      • Alan Wilkinson

         /  October 9, 2018

        Your “forex gamblers” simply estimate the consequences of govt policies and actions and price accordingly. Trump up , Ardern down. Suck it up, B.

        Reply
    • PartisanZ

       /  October 9, 2018

      Might also be stated thus Alan –

      “Let’s ban only NEW oil exploration, raise revenue sorely needed for roading & transport infrastructure by taxing petrol consumers [rather than simultaneously ‘toll roading’ & vote-trawling], increase ACC charges in line with costs, increase minimum wage and maternity leave, give trade unions [aka organized labour] a fraction more semblance of the power they once had” … and see Blazer’s comment about the $NZ … “Let the ForeX gamblers go on speculating in it …”

      “Between October 2017 and September this year, petrol prices have risen 39c – Ardern said just 6.8c of this was tax … But 9.8c of that [increase] was down to the margin from importers, she said.”

      This Labour-led government are calling all sorts of people to account … Landlords … now petrol importers …

      Courageous stuff!

      Reply
  14. NOEL

     /  October 9, 2018

    Said it before. Margins haven’t increased so the only drivers for the current price a the purchasing power of the of NZ dollar in a high crude price period.
    Both Labour and National are spinning shit.
    Labour the petrol companies are creaming it.
    National it all the fault of the regional taxes.

    Reply
    • PartisanZ

       /  October 9, 2018

      You did … and despite my partisan post just now I suspect you are correct …

      Reply
  15. Kitty Catkin

     /  October 10, 2018

    I wait to see what happens when people read how much of the petrol cost is tax.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s