Ardern left two taxes out of ‘fleeced’ fuel price claim

Earlier this week, when Jacinda Ardern said she thought motorists were being ‘fleeced’ by fuel companies, she left two taxes out of her calculations.

Stuff:  Auckland fuel tax and new excise tax left out of PM’s petrol tax calculations

Prime Minister Jacinda Ardern’s calculation of how much extra tax Kiwis are paying at the petrol pump on Monday did not include the recent excise tax or Auckland’s Regional Fuel tax.

At a press conference on Monday, Ardern said consumers were being “fleeced” at the petrol pump, blaming this on the increased margins of petrol companies.

Between October 27, 2017 and September 28 this year, petrol prices have risen 39c, according to MBIE data – Ardern said just 6.8c of that increase was due to “taxes and levies.”

That 6.8c increase is made up of a 1.77c increase in Emissions Trading Scheme (EST) taxes and 5.04c of GST over the same period, MBIE data shows.

But the 10c a litre Auckland Regional Fuel Tax and 3.5c a litre fuel excise tax, introduced on September 30, were not included in the “taxes and levies” side of Ardern’s equation.

But a spokesman for the Prime Minister said her comments were “based on the most accurate information Ministry of Business, Innovation and Employment (MBIE) had compiled at that time.”

In a statement to the Herald, an MBIE’s spokeswoman said: “current methodology does not accommodate regional prices or regional fuel taxes” in their fuel price calculations.

“Auckland City has recently introduced a regional fuel tax that will increase fuel prices in the Auckland region. Our current methodology does not accommodate regional prices or regional fuel taxes. We are developing a new methodology to replace our existing methodology that will include regional retail price differences in its measure.”

As for the 3.5c excise tax – that came into effect on September 30 and the MBIE data Ardern was referring to was taken from between September21-28, meaning it was not included in MBIE’s data either.

So Ardern could claim that sort of technically she was correct based on MBIE’s way of stating fuel taxes but it does look either sloppy or disingenuous.

Simon Bridges is trying to bark at an expensively fuelled passing car.

National Leader Simon Bridges said the Prime Minister has got this “badly wrong,” and has made a “staggering mistake.”

Bridges said in trying to defend her new fuel taxes, Ardern has shown “she doesn’t even know how much they are costing New Zealanders.”

Or doesn’t want motorists to know,

“The Prime Minister has been trying to blame fuel companies but a key driver of petrol prices is her Government’s higher taxes.”

But it has been pointed out (fairly) that Bridges didn’t bark until the shady figures were pointed out.

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.