The Cost to You at the Pump


For those of us who are interested in where our taxes go when paying for fuel at the local gas station the below outlines the breakdown to this question.  

As of writing this article the price of petrol per litre was $2.42. Based on AA New Zealand’s website the following shows taxes paid per litre at the pump:

 National Land Transport Fund: $0.63
ACC Motor Vehicle Account: $0.06
Local Authorities Fuel Tax: $0.01
Petroleum Fuel Monitoring Levy: $0.30
GST of 15% on $2.42: $0.36

In total the taxes amount to $1.36 per litre which attributes to 56.20% of the cost to you as the consumer. 

Z Energy Limited (a company who considers itself an NZ owned and operated business listed on the NZX) states that their profit margin is between 4-6 cents per litre. If we use the upper limit of this estimate of $0.06 per litre means that Z Energy Limited’s profit margin is 2.48% of the total cost to you as the customer. The rest of the cost which amounts to 41.32% would be explained by the importation, distribution and operating costs to provide this product to the New Zealand marketplace.

Now to regard what the above means in context. Using figures from the NZ Herald it was said that during the 2018 period the government budgets total spending on Transport and Communications to be $2,620,000,000 (or $2.620 billion). Total fuel purchased by the consumer in NZ during 2016 was 200.9 petajoules which equates to 200,900 Terajoules. One Terajoule is equivalent to 28,000 litres. Assuming that this amount of consumption held true during the period ended 2018, NZ will have consumed 5,625,200,000 litres of petrol in total. This means the NZ government will have accumulated $7,650,272,000 in petrol taxes for the 2018 year. The Governments total surplus during the 2018 year would then be $5,030,272,000 after fulfilling their promises in the 2018 budget. The above doesn’t put into consideration the regional fuel tax already in place in Auckland of $0.10 which other regions have attempted to put in place all over the country. 

So, in the interest of keeping things simple the government is the one that costs the consumer the most when filling up and not your local petrol supplier. All of this is just food for thought when we all start feeling the pinch at the pump.

Joanne Whyte