According to AA PetrolWatch, the price of a litre of 91-octane petrol fell from $1.69 to $1.55 in the main centres, with diesel down from $1.07 to $1.00 per litre. These are the lowest fuel prices since May 2009.

AA Motoring Affairs General Manager Mike Noon says "the Kiwi dollar rose nearly four cents during the month, while commodity prices, particularly refined petrol, fell or were stable. The combination of the two positive trends is a double windfall for motorists, hence the falling pump prices."

"Retail prices are much lower than the last time crude oil and refined petrol prices were this high, in October 2008. Back then a litre of petrol cost $1.82 and the New Zealand dollar was worth 10 cents less against the US dollar."

Petrol tax rise

From 1 October, the fuel excise on petrol rises 3 cents per litre, to 56.129 cents (excluding GST). The increase incorporates a 1.5 cent increase scheduled by the former Labour Government, and a 1.5 cent increase which replaces plans for regional fuel taxes. Diesel Road User Charges (RUC) also increase on 1 October.

The average motorist, driving a small or medium-sized car approximately 14,000kms annually, can expect to pay between $32 and $43 more per year in petrol tax, while a diesel user will pay an extra $50 in RUC.

"While the AA recognises fuel tax and RUC increases are necessary to fund the Government's roading infrastructure plans, we are disappointed with the ten percent rise in RUC for light diesels, which is higher than the three to six percent increase for heavy trucks," says Mr Noon.

Call for an excise tax on diesel to replace light RUC

The AA would like to see the introduction of an excise tax for diesel and this is supported by 73 percent of surveyed AA Members.

Mr Noon says "an excise tax in place of RUC would mean the light diesel vehicles would pay the same taxes as petrol users and would reduce compliance costs and avoidance."

"With an excise tax on diesel at the pump, those who use more fuel, either because of the distance they travel or due to poorer fuel economy, would pay more. Moving to an excise tax on diesel would not only be fairer, as taxes would be the same for both light petrol and diesel vehicles, it would also encourage the uptake of light, fuel-efficient, environmentally-friendly diesel vehicles."

"Heavy vehicle and trucks would still need to purchase RUC if there is an excise on diesel - this is to cover the extra wear and damage they cause to the roads."

For more information, go to: www.aa.co.nz/aapetrolwatch

For more information contact

Mike Noon
General Manager Motoring Affairs
New Zealand Automobile Association
T. +64 4 931 9984
M. +64 21 659 704
E. mnoon@aa.co.nz

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.