How will the govt fuel price reduce work for diesel/RUC

Forums › Transport (cars, bikes and boats) › How will the govt fuel price reduce work for diesel/RUC

xlinknz

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#295281 18-Mar-2022 14:16

I see the govt plan is to accommodate the 25c fuel reduction in RUC but so far it appears they have not said how that will work and when

We are due to RUC for our car and I thought I might see the RUC price being lower than usual but it appears not (yet). I called NZTA and the voice msg said it wil be announced in a couple of days..

For what I read it appears it maybe some sort of refund process but how they will know how many kms I did in three months is beyond me lol

Anyone else got any insight?

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#2888337 18-Mar-2022 15:27

Maybe it would have been easier if they just temporarily abated the gst on all the fuel types. I know split gst systems are very difficult to administer but when it's only a few companies with (effectively) two products, petrol and diesel, it shouldn't be that hard. It just adjusts the amount of gst the fuel companies pay to the govt.
Or remove the carbon tax temporarily. Which, according to the CEO of Gull, adds about 12c per litre to all fuels.

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Senecio

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#2888338 18-Mar-2022 15:27

We simply won't know until something is announced. Anything before then is just speculation.

Scott3

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#2889346 20-Mar-2022 23:00

I would do it as followed:

Use the last two or three (where spacing is less than 7 months) WOF/COF inspections to work out the typically annual travel of the vehicle.
Divide that by four, to give 3 months mileage.
Work out the value per KM of the 25c petrol tax reduction based on a car burning 8L/100km. = 2c/km
Mail all diesel vehicle owners, a new RUC windscreen label, and an nice letter, listing their odometer / hub-odometers readings at recent WOF / COF inspections, and explaining that they have received XXXX additional RUC km's worth $xx, in order to provide relief from the current high fuel prices.

As an example, a diesel car that was driven 14,000km would get $280 worth of RUC added, or 3684km (perhaps round up to the next 100 km or 1000km).

This should all be able to be automated, so take minimal manual effort from the goverment.

I would have a means for new cars still on their first WOF to swing by a WOF/COF agent for the Odometer to be read, and loaded into the system, so an automated RUC bonus can be mailed out (perhaps have the government pay the inspectors $20 per reading for this service). Otherwise have the automated system catch them whenever they do their next WOF.

I would ignore the fringe issues:

Vehicles that did minimal mileage last year, but heaps this year. - Simply say it was impractical to read every vehicles Odometer for the exact 3 month period, so using last year as a proxy is the best that could be done with short notice.
Trucks that use 30L/100km etc. - Simply say the rebate is so the value given back is similar to what somebody driving a medium petrol sedan would get.

Dingbatt: Maybe it would have been easier if they just temporarily abated the gst on all the fuel types. I know split gst systems are very difficult to administer but when it's only a few companies with (effectively) two products, petrol and diesel, it shouldn't be that hard. It just adjusts the amount of gst the fuel companies pay to the govt.
Or remove the carbon tax temporarily. Which, according to the CEO of Gull, adds about 12c per litre to all fuels.

GST is such an efficient effective and efficient means of collecting tax because we don't give exemptions.

The same deal could have been achieved by a 25c/L subsidy on diesel, but I doubt the government would have wanted to politically carrying the head of such a direct subsidy of fossil fuel use. Pausing emissions trading stuff wouldn't be a good look either.

Wheelbarrow01

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#2890406 23-Mar-2022 01:34

They giveth (temporarily) with one hand, whilst they plot to taketh (on an ongoing basis) with the other!

Whilst everyone is focussed on celebrating the short term reduction of fuel tax/RUC, the government are quietly planning to double or even triple the cost of transaction fees for buying rego and RUC - even though online transactions cost them next to nothing - certainly not the $12 proposed IMHO…

Full information can be found here but the salient point of this post is outlined below...

xlinknz

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#2891649 24-Mar-2022 20:10

Still nothing from NZTA how it will work despite their call centre msg saying last Fri it would be in the coming days

xlinknz

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#2892376 26-Mar-2022 14:15

An update here on when but not the how

"From Late April to late July 2022, Road User Charges will be cut by 36 percent across all legislated rates"

Good on the Beehive we site to provide info where clearly NZTA/Waka Kotahi seem so far unable too

Senecio

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#2892462 26-Mar-2022 16:40

36% is higher than I was expecting. For me it will still be less than 25c/L equivalent as my diesel passenger car is quite efficient compared to the normal Dual Cab Ute. No details yet on any limit that they will allow you buy at the reduced rate. Will make sure I stock up before the end of July if that is the case.

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Scott3

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#2897650 6-Apr-2022 13:43

And the answer is released.

https://www.stuff.co.nz/national/politics/128281591/parliament-passes-law-to-slash-road-user-charges-cut-by-at-least-27

They are just going to drop the price of RUC's, and make people declare that they aren't purchasing more than 3 months worth.

I suspect there will be a lot of people who plan to do 30,000km in three months, but end up doing a fraction of that.

Personally I liked the way I proposed earlier. (if we must subsidize fossil fuels)

Wheelbarrow01

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#2897864 6-Apr-2022 22:53

Scott3:

And the answer is released.

https://www.stuff.co.nz/national/politics/128281591/parliament-passes-law-to-slash-road-user-charges-cut-by-at-least-27

They are just going to drop the price of RUC's, and make people declare that they aren't purchasing more than 3 months worth.

I suspect there will be a lot of people who plan to do 30,000km in three months, but end up doing a fraction of that.

Personally I liked the way I proposed earlier. (if we must subsidize fossil fuels)

Yes I suspect some will do this, and I really don't think that can be helped. Personally I won't be - for the sole reason that I don't know how long I might choose to hold on to my Touareg. There's no point in loading up 30,000 RUC credits and then deciding to sell it before they've all been used. The only person who wins then is the person why buys it - certainly not me...

It's worth pointing out that a car with a lot of RUC remaining is really not worth any more on the open market than a similar car with minimal RUC remaining in my opinion.

[EDIT added last sentence]

Dingbatt

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#2897883 7-Apr-2022 06:18

I still think abating GST or Carbon tax would have been easier to administer immediately and wouldn’t be open to rorting. It is after all, a tax on a tax.

“We’ve arranged a society based on science and technology, in which nobody understands anything about science technology. Carl Sagan 1996

insane

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#2897885 7-Apr-2022 06:50

Scott3:
And the answer is released.

https://www.stuff.co.nz/national/politics/128281591/parliament-passes-law-to-slash-road-user-charges-cut-by-at-least-27

They are just going to drop the price of RUC's, and make people declare that they aren't purchasing more than 3 months worth.

I suspect there will be a lot of people who plan to do 30,000km in three months, but end up doing a fraction of that.

Personally I liked the way I proposed earlier. (if we must subsidize fossil fuels)

We're coming out of a looong lockdown where many are returning to offices and their daily commute. It's wholly unfair to expect people to only purchase 3 months of RUC at a time based on the last few months use.

I just load up 5000km at a time as any more costs a lot in one go, and any less is just plain annoying given the fees.

If they want people to only purchase 3 months of RUC, drop the processing fees too.

Geektastic

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#2897899 7-Apr-2022 08:13

They don’t place any restriction on people filling tanks or bowsers with petrol to stockpile it. Why should RUCs be any different? I’ll buy at least 10,000 when the price drops and they can argue with me if they so wish.

trig42

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#2897909 7-Apr-2022 08:44

I'll be buying 10,000 as well. That is my normal amount (though, with the Auckland Lockdowns, it's been more than three months since I last renewed).

Scott3

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#2897930 7-Apr-2022 09:28

Geektastic: They don’t place any restriction on people filling tanks or bowsers with petrol to stockpile it. Why should RUCs be any different? I’ll buy at least 10,000 when the price drops and they can argue with me if they so wish.

The situation is not comparable:

There are barriers to storing large quantities of petrol, such as the need for vessels to put it in, or cost to buy them. - HSNO regulations put restrictions around storing the fuel too.
Petrol's shelf life. - generally speaking consuming petrol is best consumed within 6 months.
25c tax cut on $3/L petrol is an 8.3% discount. Need to tie up 4.3 times as much capital for the same savings vs buying RUC's at a 36% discount.
One would also be speculating petrol prices will remain high. Quite possible that the conflict in Ukraine will end, and fuel prices will drop dramatically as a result.

With Diesel RUC's;

Zero storage cost.
They don't have a limited shelf life.
36% discount.
Not coupled in with fuel prices, so negligible chance that they will end up even cheaper in a few months.

That said, While it would be very easy to retrospectively audit use. (i.e. if somebody brought more discounted RUC's than they mileage they did between 12 month WOF's, it would be obvious they over purchased discounted RUC's), I suspect the government will turn a blind eye to this.

There is a per transaction fee. So RUC's is typically purchased in large blocks by many.
The press releases seem to discuss intent, rather than actual usage. Intent is very hard to prove. I could have been planning day trips to distant surf beaches twice a week for the three months, but then change my mind after the first trip.

empacher48

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#2897936 7-Apr-2022 09:44

I'll be massively increasing the amount of RUC I buy over the next three months too.

Pre covid was driving 30,000km a year for my work commute. Then during Covid I went to doing less than 10,000km a year because I wasn't required to work as much.

Borders open more fully in a week or so, so my rosters have gone back to the way they were pre-covid, so back to 30,000km a year.

If they want to restrict how much RUC I buy based on what I've done over the last two years, I'll be asking for that statement in writing for when I'll end up driving around with an expired RUC. "I'm sorry officer, NZTA won't sell my anymore RUC because they think I'm abusing the system."

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