Fueling inflation

May 22, 2018

The headline said As fuel prices hit record high, govt mulls tax cut.

That was in India.

Prices are high in New Zealand too but the tax will be going up.

The AA’s weekly fuel price report last week noted:

Another increase in fuel prices, the second in a week, this time led by Z, with all fuels up 4 cents per litre. This brings the ‘national’ price of 91 octane to $2.30/litre, the highest price ever recorded – in nominal terms that is; as we note below, we’ve paid much more in real terms when you adjust for inflation. Plus the tax on petrol has now broken through the $1/litre barrier. And all this before Auckland Council is due to introduce a 10cpl regional fuel tax in July, and the Government a 3-4cpl increase in petrol excise later this year.

Why have prices risen 23cpl in the last 2 months? International refined commodity prices have risen over 16% since the last price cut in February due mostly to geopolitics, while the NZ dollar has fallen nearly 5c against the US$.

Petrol tax is already more than $1 a litre. It will go up three to four cents for all of us later in the year and Aucklanders will face another 10 cent/litre tax from their council.

It’s hard enough accepting more than $1 in fuel tax when it was going on roads. It will be even harder to swallow when it’s going to be spent on public transport in Auckland.

The government has been telling us about how it’s helping the poor.

With fuel prices rising and tax on top of that, they will be giving with one hand and taking with the other.

Everything we buy is transported. If the fuel price rises so will everything else and that will fuel inflation and it’s always the poor who are hardest hit by that.


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