Scrapping RUC and paying Diesel tax at the pump?

Forums › Transport (cars, bikes and boats) › Scrapping RUC and paying Diesel tax at the pump?

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#2001422 24-Apr-2018 10:12

Jase2985:

MikeAqua:

Services stations just over the border will do well out of a regional fuel tax.

unlikely as the distance most people will have to travel will offset the saving of the fuel tax. so you will end up paying more for the false economy.

if you live close to the border it may work in your favour but for people in auckland its self unlikely

Agreed. three cents / litre for a 35L vehicle amounts to barely a dollar....which would be about about 45% of a litre.....or about 4-5km on a flat road with no wind (rough average of smaller and larger vehicles). Maybe it would matter for a PHEV that can roll down and back on EV power...then use the petrol elsewhere. But then why take half an hour to save $1? Waste of time.

Not worth it.

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Fred99

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#2001436 24-Apr-2018 10:40

Linuxluver:

Jase2985:

MikeAqua:

Services stations just over the border will do well out of a regional fuel tax.

unlikely as the distance most people will have to travel will offset the saving of the fuel tax. so you will end up paying more for the false economy.

if you live close to the border it may work in your favour but for people in auckland its self unlikely

Agreed. three cents / litre for a 35L vehicle amounts to barely a dollar....which would be about about 45% of a litre.....or about 4-5km on a flat road with no wind (rough average of smaller and larger vehicles). Maybe it would matter for a PHEV that can roll down and back on EV power...then use the petrol elsewhere. But then why take half an hour to save $1? Waste of time.

Not worth it.

OTOH if there are two gas stations 100 metres apart but each on different sides of the border, then the regional fuel tax will have a serious commercial impact.

One of the owners would have a right to be more than a little upset if they were losing customers or facing lower profit margins if the competition just down the road had been given a commercial advantage like that.

kryptonjohn

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#2001478 24-Apr-2018 11:18

Geektastic:

Perhaps, perhaps not. Who knows? The UK with many times our population and number of vehicles manages to police it adequately and I assume that they have examined, probably several times, the costs of various ways of doing it. Do you have evidence to support the claim it would cost more?

If some monolithic government likes any idea related to increased complication and compliance while generating tax revenue my default position is that it's a bad idea!

RUC is a pretty nice and simple user pays tax. I hate complexity and having to expand the distribution network to deal with coloured diesel like the UK sounds like a waste of money and space to me.

kryptonjohn

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#2001483 24-Apr-2018 11:20

Fred99:

Linuxluver:

Jase2985:

MikeAqua:

Services stations just over the border will do well out of a regional fuel tax.

unlikely as the distance most people will have to travel will offset the saving of the fuel tax. so you will end up paying more for the false economy.

if you live close to the border it may work in your favour but for people in auckland its self unlikely

Agreed. three cents / litre for a 35L vehicle amounts to barely a dollar....which would be about about 45% of a litre.....or about 4-5km on a flat road with no wind (rough average of smaller and larger vehicles). Maybe it would matter for a PHEV that can roll down and back on EV power...then use the petrol elsewhere. But then why take half an hour to save $1? Waste of time.

Not worth it.

OTOH if there are two gas stations 100 metres apart but each on different sides of the border, then the regional fuel tax will have a serious commercial impact.

One of the owners would have a right to be more than a little upset if they were losing customers or facing lower profit margins if the competition just down the road had been given a commercial advantage like that.

I expect to see mega-sized gas stations built just outside the Auckland boundaries once the regional tax comes in, along with the death of gas stations and other small dairies and grocery shops that are inside but near the boundary.

kryptonjohn

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#2001497 24-Apr-2018 11:27

elpenguino:

MikeB4:

What about boats, compressors, tractors etc etc We would have to go down the track of different coloured fuel and there would be greatly higher policing costs.

Not really.

Use of my petrol mower means I'm paying for a road I'm not using, why should a diesel mower get a free ride , as it were?

All of those non-road uses of diesel are a small minority compared to the on-road uses. You don't build a system around the minority.

Keep it simple, charge everybody at the pump.

They're not getting a free ride - you are getting penalised when mowing your lawns and subsidising drivers though. I don't believe you think it makes it more "fair" to also penalise someone who runs a stationary diesel engine or heater.

Keep it simple and make petrol RUC based like diesel. I pay RUC on my car and have "zero" issue with periodically going online and "topping it up" (although if you don't locate the little windscreen envelopes properly they can be hard to pick out).

wellygary

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#2001501 24-Apr-2018 11:32

Linuxluver:

Agreed. three cents / litre for a 35L vehicle amounts to barely a dollar....which would be about about 45% of a litre.....or about 4-5km on a flat road with no wind (rough average of smaller and larger vehicles). Maybe it would matter for a PHEV that can roll down and back on EV power...then use the petrol elsewhere. But then why take half an hour to save $1? Waste of time.

Not worth it.

What about at 11.5 cents/litre,

Jase2985

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#2001633 24-Apr-2018 13:41

@wellygary:

Linuxluver:

Agreed. three cents / litre for a 35L vehicle amounts to barely a dollar....which would be about about 45% of a litre.....or about 4-5km on a flat road with no wind (rough average of smaller and larger vehicles). Maybe it would matter for a PHEV that can roll down and back on EV power...then use the petrol elsewhere. But then why take half an hour to save $1? Waste of time.

Not worth it.

What about at 11.5 cents/litre,

60L is $6.9 divide that by $2.115 per L and you get 3.2L on an average car that would get you 50km (6.4L/100km)

From Papakura (southern most suburb of Auckland City) its 23km to Pokeno which in Wakiato. return trip 46km, 20 mins each way and 10 to fill up so 50 min round trip.
North of Auckland its about 65Km to the boundary of the Auckland region from albany, even if it was to silverdale, its still a 25km round trip to silverdale for a saving of $3.45.

Really not worth it on the amount of fuel the average consumer uses not where the average consumer lives in Auckland.

Scott3

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#2001863 24-Apr-2018 18:34

MikeAqua:

If I interpret yoru post correctly now diesel boat users in Auckland will also get screwed. If it's on a trailer I guess you would just tow it outside of the Auckland area and fill up the boat and tow vehicle. Services stations just over the border will do well out of a regional fuel tax.

The regional fuel tax will be raking it in from non-trailerable recreational diesel boats.

If the published FAQ's are correct, all recreational boaties (petrol and diesel) will be able to claim a regional fuel tax.

Will there be a rebate system for other off-road users of fuel?

Yes. The NZ Transport Agency is hard at work to implement a rebate system for fuel
(both petrol and diesel) used in dedicated off-road vehicles or other commercial offroad
use, such as fuel used on farms. Where a person can claim a refund for fuel
excise duty, they should also be able to claim a rebate for regional fuel tax

https://www.transport.govt.nz/assets/Uploads/Land/Documents/RFT-QAs-March-2018.pdf

My interpretation: A vehicle is a machine that transports people or cargo, and includes aircraft, spacecraft, and watercraft along side road and rail vehicles. Boats (other than a few obvious exceptions) are dedicated for off road use, so they meet that part of the definition to.

The bill itself is not really helpful in this interpretation. It sets out certain (very limited) exceptions in section 65A (like use in any vehicle that runs exclusively on rails),and allows the governor general to prescribe uses of fuel (other than use in a vehicle on a public road) that are exempt from regional fuel tax. One would assume, that NZTA has already taken steps get regulations added immediately for off road vehicles.

If the FAQ is correct, and Exemptions from the regional fuel tax are available for recreational boating (petrol and diesel), this will open a real can of worms. It seems the current inability to claim road tax back when using petrol in recreational boats is driven largely by the massive amount of paperwork it would generate, and the risk of fraud (very easy to overstate the fuel burn of your boat, when some of the fuel was actually burnt in road vehicles...). If we accept the paperwork, and fraud risk when it comes to the regional fuel tax, for consistency we must also allow rebates from the road tax component of petrol.

Maritime NZ estimates put petrol use in recreational boat at around 1.8PJ per year. This works out to 52,000,000L. If we refunded tax on this, it would come to roughly $35m per year in lost tax revenue (and admin costs) for genuine claims, plus any fraudulent ones....

Linuxluver:

It's easy enough to get the telematics in modern cars to talk to a remote server and upload mileage at regular intervals. Maybe it should be a requirement.....along with reporting peak speeds for speedy application of appropriate fines. Though if cars are automated, that aspect will fade away.

Technically possible to require an OBDII data logger installed in every (modern) car, to be read at WOF time (or remotely by cellular). In the USA some insurance companies require this to assess your driver risk profile. Might be tricky to get political support for that one, and if we go that route, it makes sense to go one step further, and go for GPS based, real time congestion charges in place of flat rate per KM road user charges.

Jase2985:

MikeAqua:

Services stations just over the border will do well out of a regional fuel tax.

unlikely as the distance most people will have to travel will offset the saving of the fuel tax. so you will end up paying more for the false economy.

if you live close to the border it may work in your favour but for people in auckland its self unlikely

I don't think I would go out of my way fuel without regional tax (unless I was filling up say a 1000L trailer tank...).

That said, I definitely would gas up outside of Auckland every-time I left town for another reason.

Long hall trucking fleets are likely to have a policy that all trucks with less than 3/4 fuel must fill up before entering to Auckland....

wellygary:

The proposed legislation is here

http://www.legislation.govt.nz/bill/government/2018/0038/latest/whole.html#LMS24592

and from a cursory glance it is a dog's breakfast, lots of "If A knows B is going to transport fuel into the region than A must include the tax on fuel supplied to B" - how a fuel supplier can "know" what a national trucking operator or delivery company is doing with its fleet is laughable,

I get the feeling that lots of commercial vehicles are about to get reregistered to outside Auckland addresses,

Also a big kicker is that types of exemptions can be granted by regulation, so there is going to be a huge queue outside ministers offices as every man and his dog argue that their use ( Bus operators, taxis, ubers, etc ) should be exempt,

I agree the bill is a mess.

That said, my understanding of fuel tax is that it is applied at the custody change point at the terminals. For example at WOSL (wiri oil terminal), the fuel in the tanks has no tax applied (The terminal is like a port, and is a customs controlled facility), but when it is loaded into a truck to be taken to a petrol station, the tax is applied at that point. WOSL would simply require the destination of each truck compartment to be declared. Little incentive for a large petrochem trucking company (who takes no ownership interest in the fuel) to lie to fraudulently state an incorrect destination... (of course, there is every incentive for the owner of say mobile fuel fuel retailing business (say minitankers) to miss-declare.

I don't think registration location matters, only point of sale of the fuel.

Regarding lobbying, regulations cannot exempt on road users, but your point still stands if you consider the likes of the Auckland chainsaw users association, Private generators owners association, diesel home heating association etc...

--------

Regarding options for road tax:

RUC on all vehicles, remove petrol road tax: this is feasible, but we would have reduced the current incentive for people to get efficient petrol vehicles (somebody with a Prius would have much increased running costs, somebody with a v8 petrol Holden or land-rover would have much reduced running costs. Also note that odometer based RUC is somewhat easy to evade (not infeasible to install a switch that stops the speedo & odometer from running)

Road tax on diesel for light vehicles, Supplementary RUC for heavy vehicles only: Diesel would be come a viable fuel for small cars (probiably not what we want given what we now know about diesel fumes). Hard to avoid tax, but if we gave rebates on personal use of diesel (i.e. for home heating), then evasion options would become available. Substantial administrative costs (dead weight loss on the economy...)

Red diesel: Infrastructure costs of duplicating our diesel distribution network probiably make this a non starter, but otherwise avoids the admin costs of processing massive numbers of rebates, and associated evasion risk...

MikeAqua

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#2002917 26-Apr-2018 16:34

Jase2985:

MikeAqua:

Services stations just over the border will do well out of a regional fuel tax.

unlikely as the distance most people will have to travel will offset the saving of the fuel tax. so you will end up paying more for the false economy.

if you live close to the border it may work in your favour but for people in auckland its self unlikely

I didn't make it clear, but I was specifically thinking about boaties when I made that comment. For example a gutsful of fuel for my boat is 150L (+ 40L reserve), then there is the tow vehicle. At the very least on any trips away boating you would cross the border before fuelling boat and vehicle, and re-fill on the way home.

In addition: -

Driving a car through/to Auckland you would fill up outside the tax zone if at all possible. I drive Nelson to Kerikeri most years. I would fill up in Picton, Tokoroa, Whangarei. Have any meals/coffees there too.

Trucks which have massive range would have often have the flexibility to fill up outside of Auckland.

Anyone in construction or forestry could fill that 500L tanker up outside of the tax zone.

Mike

Scott3

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#2003063 26-Apr-2018 18:56

I was specifically thinking about boaties

NZTA faq's state rebates will be available for fuel used in vehicles that operate exclusively off public roads.

DaveDog

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#2003238 27-Apr-2018 08:41

kryptonjohn:

elpenguino:

MikeB4:

What about boats, compressors, tractors etc etc We would have to go down the track of different coloured fuel and there would be greatly higher policing costs.

Not really.

Use of my petrol mower means I'm paying for a road I'm not using, why should a diesel mower get a free ride , as it were?

All of those non-road uses of diesel are a small minority compared to the on-road uses. You don't build a system around the minority.

Keep it simple, charge everybody at the pump.

They're not getting a free ride - you are getting penalised when mowing your lawns and subsidising drivers though. I don't believe you think it makes it more "fair" to also penalise someone who runs a stationary diesel engine or heater.

Keep it simple and make petrol RUC based like diesel. I pay RUC on my car and have "zero" issue with periodically going online and "topping it up" (although if you don't locate the little windscreen envelopes properly they can be hard to pick out).

I totally agree with this... They should remove all tax from fuel at the pump (except GST of course) and introduce RUCs for all vehicles. While I'm not familiar with the online system, surely it could be set up to email you at set periods where you get a link to simply pop in your current mileage - and couldn't service stations also be selling them too?

MarkH67

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#2003739 27-Apr-2018 20:14

Aredwood: The fairest system long term. Is simply put the environmental costs of burning petrol and diesel on respective fuel taxes. And put RUC on all vehicles. As EVs still cause costs to the roading network for things like traffic congestion. And since EVs have shorter range than ICE cars, they would tend to get used for shorter trips. But for inner city areas, this means more risk that people will drive an EV, instead of taking public transport, or cycling.

I quite agree, except for the thing about EVs having shorter range and tending to get used for shorter trips. That isn't anywhere near close to being true, not for any EVs manufactured after 2020 (a bit of a guess). Later this year the EVs with ~360km range will start arriving, these will be fine for longer trips. For many people EVs will become the only cars they own and will be used for ALL trips. EVs used for limited distance commuting might be what you are thinking of, but that is definitely not the way things are headed - EVs are being developed to REPLACE fossil fuel burning cars.

I'd like to see a hefty carbon tax put on petrol, diesel, coal & gas. I think that power companies should be paying that carbon tax on any coal or gas they burn to generate electricity. I should be paying that tax when I buy petrol for my motorcycle. Everyone that burns fossil fuels should be paying a carbon tax. Maybe start out at 50c per litre and increase it later.

I think that all vehicles that use public roads should be paying towards the cost of maintaining those roads. A RUC seems to be the simplest solution there. There needs to be a cheaper RUC for under 2 tonne vehicles than the current 62c per km for all under 3.5 tonne diesel vehicles - a Nissan Leaf should be paying less than a big SUV or 4x4. I'm fine with EVs not having to pay for now, but they will need to contribute at some point, especially as their number increase.

kryptonjohn

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#2003756 27-Apr-2018 20:59

Easy for you to say when you'd be paying sod all carbon tax.
Too bad for most people who can't afford an electric I.e. newish car and can't use a bus or train because of location.
Still to be resolved is the issue of energy distribution being shifted from the liquid fuel network to the electricity network and the new generation capacity to replace the old fossil energy consumption.

MarkH67

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#2003855 28-Apr-2018 05:41

kryptonjohn: Easy for you to say when you'd be paying sod all carbon tax.

Easy to say "what about the cost for those that can't afford it", but what about the cost to the planet if we don't take drastic steps to reduce our CO2 output. What planet will the poor people live on if we stuff up this one?

There is a huge amount of tax on cigarettes because they are bad for people's health, isn't the health of our planet important too?

Goosey

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#2003856 28-Apr-2018 05:58

RUC needs to stay as is, abeit could possibly be more user friendly.

Reason: Diesel is used for more applications than just automobiles.

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