Editorial: Competition needed at the pumps

Last updated 05:00 23/08/2014

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OPINION: Friendship is honey - but don't eat it all - Moroccan proverb.

It seems more than a tad unfair that residents of Taranaki, the home of  New Zealand's  oil and natural gas production, have to pay more for petrol than those who live in Whanganui.

The energy products from our region generate $NZ2.5 billion in GDP for the country annually. Add that to the dairy industry's $NZ1.4 billion and it is obvious that the rest of the country is highly dependent on us.

It is even more galling when we consider that, in comparison, Whanganui's  total contribution to the GDP could be written on a postage stamp and still have room for the Lord's Prayer.

The reason given is that Whanganui has a competitive element that we do not - Gull service stations. They sell petrol more cheaply than the big four - Z, Caltex, BP and Mobil - encouraging those companies to meet the lower prices.

In other words, Gull is competition. But hang on a moment. For years the oil companies have been telling us that they do not fix prices.

A 2008 Government report into  petrol pricing found the industry was ''fundamentally competitive''.  

However, it did not explain exactly what ''fundamentally competitive'' actually meant. That  could well be rewritten as basically about the same as the other petrol sellers.That report also stated it was a myth that petrol prices were fast to rise and slow to fall.

''I think people can take some assurance from here that they're not being conned at the pump,'' said the then Commerce Minister Lianne Dalziel, who commissioned the $25,000 report.

Customers are supposed to benefit from competition, that's why the government deregulated the electricity companies. The reforms were supposed to bring the prices down.

Well, hello. The problem then is the same one now - our population is too small.

There are not enough customers to make certain products more cost-effective. Petrol is in that category.

The more things change the more they stay the same, especially on the political landscape.

The Greens want more spent on public transport, elsewhere there is talk of  tax increases to cover more ''noble'' spending. Yet Kiwis are already heavily taxed, especially when it comes to petrol.

The total petrol tax is 67.129c a litre of which 56.5c goes to the National Land Transport Fund, 9.90c goes to the ACC motor vehicle account, 66c is the Local Authorities fuel tax bite and 0.045c is the petroleum or engine fuels monitoring levy.

On top of that lot motorists are charged GST  of 8c, which amounts to a tax on a tax.  

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We would be helped if the government didn't take so much in taxes or even if it dropped the GST component - the tax on a tax - but this is election year so that is not going to happen. 

Whoever gets into power will probably need to use ethose taxes to fund their promises. Meanwhile, we who live in the energy capital of New Zealand, continue to pay more for petrol than our neighbours do.  

Drivers will be saying: hurry here, Gull.

- Taranaki Daily News

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