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Topic # 241055 8-Oct-2018 20:00
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A little sad today to see that we can be expecting the price of petrol to touch $3/litre by Xmas. Without trying to be political, it is a little hypocritical to simply blame the petrol companies when the tax take on a litre is approx 80cents/litre and I believe that this figure doesnt include GST. The PM said we are now paying one of the the highest prices per litre in the world.


Surely it is timely to look at the entirety of the tax take and analyse what it is used for plus holding the fuel companies to task. It would be quite interesting to see a breakdown of what the tax is used for on a per annum basis.


We are now in a situation where local governments across NZ are all wanting to add regional taxes to our fuel costs.


I do hope that our politicians are aware of just how much this is going to contribute to annual inflation as it will affect almost everything we purchase.


Not only are we now paying massive excesses on our electricity but our fuel as well.


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  Reply # 2103546 8-Oct-2018 20:08
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MBIE do a weekly price monitor.  It even has pretty graphs showing the amount of tax which is a pretty horrific proportion.  Its not new.  And it probably was something that was obvious before the last election but we'll wait until next year before any competition analysis is complete.  It will be interesting to see if the reduction in the number of operators with Caltex being bought by Z Energy (and approved by the Commerce Commission despite the increase in concentration within the sector by the acquisition) has had any bearing on the increase in margin.  

 

https://www.mbie.govt.nz/info-services/sectors-industries/energy/liquid-fuel-market/weekly-fuel-price-monitoring

 

 

 

The forecast of $3/litre by Xmas is based on some pretty broad assumptions (Crude at USD100/barrel, currency at 62c) - such forecasting has been fraught with error in the past but it makes good headlines.


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  Reply # 2103549 8-Oct-2018 20:17
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If you really want to be frightened, don't forget to add back the income tax, ACC etc which you had deducted from the money you use to buy petrol, as well as the actual taxes in the petrol price...!

Edit: I looked at the comparison graph. No wonder everything costs less in the USA! The government here is the one milking us as much as the petrol companies.





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  Reply # 2103551 8-Oct-2018 20:20
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The highest tax bracket in Australia is 45c to the dollar ....




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  Reply # 2103552 8-Oct-2018 20:22
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Geektastic: If you really want to be frightened, don't forget to add back the income tax, ACC etc which you had deducted from the money you use to buy petrol, as well as the actual taxes in the petrol price...!

 

Inflation figures will be very interesting next year as we are also having some quite significant wage rises with more to come.


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Reply # 2103555 8-Oct-2018 20:32
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The more the media talk about it hitting $3 per litre by christmas the higher chances of the oil retailers trying to reach it cause the public are expecting it

 

John





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  Reply # 2103556 8-Oct-2018 20:36
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Based on some pretty confidential data I've seen a few times in recent months it's safe to say margins have not gone up significantly - those who say they are basically misinterpreting MBIE data and/or have no idea what they're really talking about.

 

What we're seeing is the result of an incredibly competitive retail market. Gull are selling their watered down ethanol blended petrol that a) costs less and b) they pay less excise tax on, meaning other operators are forced to compete on a regional basis with Gull. As Gull's cost base is so much lower with unattended sites and limited distribution their overall costs of running their business are a mere fraction of what it costs the other big operators. The other operators have no choice but to compete however - and that's meaning that the "national" price (which kinda doesn't really now but is set by Z) is effectively subsidising the lower fuel costs elsewhere.

 

MBIE reporting shows margins going up is based on this - MBIE have no capability to monitor regional pricing, nor factor in the discount schemes such as Smartfuel that have further skewed the market and should be banned. The national price is a minimim of 6cpl higher than it should be, simply so they can give instant 6cpl discounts. Overall market gross profit is only up slightly from what it was a few years ago.

 

In a nutshell the reason for increasing petrol costs is primarily a combination of a) high oil prices and b) falling $ but the effects of the Auckland tax increase, discount schemes and the requirement to subsidise petrol to compensate for discounting are all having an impact.

 

Z should have never been allowed to buy Caltex and the only ComCom member smart enough to realise that was Dr Jill Walker (the ACCC representative on secondment) who had already dealt with the Australian fuel market years before and been involved in the decision to ban supermarket vouchers in excess of 4cpl. The problem was the fuel market was so poor with both Mobil and Caltex looking to exit because they couldn't make money, and nobody else wanted the asset.

 

Z played their hand and won. They've now got Z shafting customers hand over fist with the highest retail prices in the market, and Caltex that's offering higher levels of discounting. Combining the two gives them far better overall margins that either Mobil or BP.

 

Petrol in Wellington and the South Island should be around 16c less than what it is now (10c for the subsidies and 6c because Smartfuel should be banned) - but for that to happen others elsewhere in the country need to pay more.

 

 

 

 

 

 


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  Reply # 2103559 8-Oct-2018 20:47
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I was driving down to Tukini Ski Field from Auckland and back last week and pumped up for 1.97$ at Gull somewhere before Taupo. Was also surprised how the prices vary all around the place, most places getting close to Auckland prices even though they haven't got any Goofy tax.


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  Reply # 2103560 8-Oct-2018 20:52
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From the Radio New Zealand website

 

Prime Minister Jacinda Ardern says petrol consumers are being "fleeced" at the pump

 

Damn right they are!!!! Right at the front  of the queue is the government. How much tax have they added recently, at least 15c/litre.





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  Reply # 2103561 8-Oct-2018 20:56
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Z also has the contract to supply PaknSave's fuel but for some reason,in Rotorua, Paknsave can sell it 20cents a litre cheaper than the Z station just across the road. Not sure how that works.





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  Reply # 2103562 8-Oct-2018 20:56
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Gull surely have no effect below Masterton where I think their most southerly outlet is?





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  Reply # 2103563 8-Oct-2018 20:58
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eph:

I was driving down to Tukini Ski Field from Auckland and back last week and pumped up for 1.97$ at Gull somewhere before Taupo. Was also surprised how the prices vary all around the place, most places getting close to Auckland prices even though they haven't got any Goofy tax.



I was paying over $2.40 in Martinborough 3 weeks ago, although that was 98.





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  Reply # 2103564 8-Oct-2018 21:08
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Geektastic: Gull surely have no effect below Masterton where I think their most southerly outlet is?

 

 

 

The average price of 91 in Masterton is currrently $2.31 per litre, Greytown $2.31, Martinborough $2.33 and in Wellington it is $2.47 per litre. It would appear that Gull is influencing pricing in Wairarapa





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  Reply # 2103565 8-Oct-2018 21:08
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vexxxboy:

 

Z also has the contract to supply PaknSave's fuel but for some reason,in Rotorua, Paknsave can sell it 20cents a litre cheaper than the Z station just across the road. Not sure how that works.

 

 

Because Te Ngai Rd normally has some of the cheapest petrol in the country so they're simply competing with that.

 

What I find amazing about Rotorua is that so many people won't/don't drive 5 mins to save 10 - 15c. Te Ngae Rd seems to be 213.9 at present with the Z and Caltex in the CBD being 226.9


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  Reply # 2103567 8-Oct-2018 21:12
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The petrol companies will also be using the discount vouchers as a means of increasing the average $ amount spent per fuel purchase. Far more profit in serving 1 person who spends $100 on fuel in 1 go. Vs 10 people who only spend $10 on fuel each.

The average fuel efficiency of the vehicle fleet is also getting better, as people respond to higher petrol prices by buying cars that use less fuel. So the government is forced to respond by raising fuel taxes.

As for Shell selling their petrol station network to what is now Z. That is simply a smart long term move by Shell. As they have been exiting the retail fuel sales business worldwide, and concentrating on drilling, refining, commercial sales etc. As they would know that EVs will quickly take up the bulk of retail petrol sales. Leaving mainly diesel sales to large customers who can drive hard bargains. Shell sold up while they could still get a good price.

Z has already admitted that their primary business will be gone in 30 years time. I think that it will be gone in 20 years time, if not sooner. So of course they will milk the market while they still can. Since the biggest savings from buying an EV, Go to those who drive the most. I predict that NZ will only need to get 10 -20% of the vehicle fleet converted to EVs. To eliminate 50% of petrol usage.





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  Reply # 2103570 8-Oct-2018 21:25
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Shell still had a fairly strong presence in America last time I was there. Lots of stations all over the place.


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