Monday, 5 May 2008

How to Lower Petrol Costs!

The price of petrol has gone up again, which in part has led to the rise in prices in other areas, notably food. The left is complaining about how petrol companies are keeping prices sky high, with their profits as proof of that.

But little of the total price of petrol in New Zealand goes to the coffers of oil companies. 50% of NZ's petrol cost is paid in taxes -and the government is getting more than the oil companies! According to a BP report card on NZ fuel costs (courtesy of Sus):

Average breakdown of a NZ litre of 91 Unleaded in April 2005:

03.3% Operating costs, wholesale and retail margins

03.6% International shipping costs

45.8% Crude Oil and refining costs

47.4% Taxes

Similarly, other countries with high petrol taxes also have the highest costs. Petrol in Europe, especially the Scandinavian countries, is 2-3 times higher than the cost in the US, where taxes are relatively few.

Want a quick way to cheap fuel? Abolish taxes on fuel.


libertyscott said...

True Callum, though you have to introduce road user charges for cars, otherwise cars are not paying for road use. btw added you to my blogroll, a foolish oversight on my part.

Callum said...

Yes, road user charges would be ideal. Also, the initial high charges of the system (as roading infrastructure is funded by petrol tax and local council rates) could be offset by the end of the petrol tax, and a significant drop in council rates. It would encourage prudence with vehicles.