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No easy solution to petrol prices

Opinion Piece

Few things are as likey to get kiwi’s blood boiling than petrol prices as the present furore shows but despite the intervention of Prime Minister Jacinda Ardern there may be no easy solution.

Motorists have been rocked by a steady increase in fuel prices which have gone up a staggering 39 cents a litre in a year.

Ardern entered the debate strongly with a statement that she believed drivers were being “fleeced” by the oil companies.

The government will introduce urgent amendments to the Commerce Act to allow the Commerce Commission to investigate the price of fuel and the margins. Ardern wants to see this done in two weeks.

As a sidebar she also said the government might do something similar with supermarket prices.

Not surprisingly the oil companies are disputing the “fleecing” claims. Gull general manager Dave Bodger told Radio New Zealand this week the market was competitive and prices were fair and there were similar statements from other companies.

Petrol prices are being hit by a perfect storm of a falling New Zealand dollar and rising crude oil prices.

But it also has to be said that government taxes are playing a part.

At the end of last month the fuel tax went up 3.5 cents a litre and further increases are planned for 2019 and 2020. Aucklanders have their 11 cents a litre regional tax also added, a big blow in a city where people have to do a lot of driving.

AA spokesman Mark Stockdale is right when he says motorists are fed up with paying new or increasing taxes when they are already paying a high price for petrol.

Minister of Finance Grant Robertson will have to keep his wallet closed as motorists call for some relief from the 5.5 billion budget surplus.

And National is looking to make political capital out of a bad situation by pointing at the government’s fuel taxes as the main reason for the increase which is only partly true.

This is the sort of thing that can quickly turn people against a government. Ardern must act soon.