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Petrol Tax and Costs explained - what taxes do you pay at the pump?

There is a lot of talk about the cost of petrol and fuel at the pump for motorists in New Zealand – and that talk includes everything from the Auckland fuel levy right through to how much we actually pay as New Zealanders and where it all goes. So, to help out I thought I would try and explain it. Firstly a sizeable portion of what makes up the cost of fuel goes into Government fees and charges, taxes and levies. Let me explain: It might surprise you to know that the cost of fuel is made up of excise tax, ACC, the emissions trading scheme levies related to petrol as well as emissions and monitoring levies for diesel. Around 70cents per litre is collected by the Government and when it comes to those living in Auckland add another 10cents per litre for what is known as the Auckland Regional Fuel Tax – and then there is GST of 15% on top of that. Lets go further and break down some of those numbers:

  1. 70.024 cents - National Land Transport Fund

  2. 6 cents - ACC Motor Vehicle Account

  3. 0.66 cents - Local Authorities Fuel Tax

  4. 0.6 cents - Petroleum or Engine Fuels Monitoring Levy

In addition, GST is collected on the overall price of fuel including excise. The GST on excise amounts to 14.6 cents per litre "tax on taxes". All fuels also pay an Emissions Trading Scheme levy (approximately 20 cents per litre). In Auckland, an additional 10 cent per litre Regional Fuel Tax is levied on all petrol and diesel sold in the Auckland region (since July 2018). The vast amount of money goes into the National Land Transport Fund which funds everything from roads and bridges, maintenance of infrastructure and so on.

Where does a large amount of our petrol come from? Imports basically. Fuel that's imported directly into New Zealand comes mainly from refineries in Asia, the Middle East and the Pacific, primarily via the Singaporean and Korean hubs. When there is a major global event, such as the war unfolding in Ukraine, this has implications for global oil prices which in turn impact fuel and petrol costs – and its not just on motorist at the pump, its also jet fuel for planes and fuel for trucks – all of this sees increasing costs to get people, goods and services from point a to point b – thereby seeing additional lift in overall cost of living. When it costs more to get goods to market (such as supermarkets) then there is the very real risk that food prices go up.

And that’s fuel explained.

Matthew Tukaki, Chairman of the National Maori Authority


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