In August petrol prices climbed steadily. In the last week of August, prices leapt to a record 152.9 cents/litre in main centres for 91 octane, as oil companies anticipated high spot prices on the back of damage to US refineries by Hurricane Katrina. Prices are tipped to remain high, and any other disruption to supply will lead to further volatility.

The rising fuel prices mean since January GST has increased from 13 to 17c/litre, a windfall of 4c/litre for the Government. On every litre of petrol there are taxes and levies of 64 cents including GST, of which only 22.49 cents goes towards transport infrastructure and services.

This leads the AA to call for the newly elected Government to reduce the taxes on petrol, and to scrap the planned petrol tax increases. Already scheduled are a further tax increase in April 2006 (linking petrol tax to an inflation index) and another in 2007 (the Kyoto carbon charge).

Motorists are warned to consider both cost and safety when considering ways to save petrol. Those who travel high mileages can afford to spend more on energy efficient vehicles and adapting to alternative fuels, such as conversion to LPG. Those who travel low mileages may find less drastic measures are more cost effective - such as simply driving more efficiently, servicing the car properly and combining trips.

The AA also warns anyone considering whether to get a motorcycle to save a few dollars to carefully weigh the increased risk to life and limb. A modern small car has similar fuel efficiency, but is up to 80 times safer than a large motorbike. A better option would be a bicycle, which is ten times safer than a motorbike and gets you fit as well, while buses are the hands down winners on safety.

Ends

For more information contact

Jayne Gale
Motoring Policy Manager
T. +64 4 931 9992
M. +64 21 474 498
E. jgale@aa.co.nz
W. www.aa.co.nz/media

The New Zealand Automobile Association is an incorporated society with over one million members. It represents the interests of road users who collectively pay over $2 billion in taxes each year through fuels excise, road user charges and GST