New Zealand tackles rising fuel prices with tax cuts

Soaring petrol prices, cost-of-living crisis: Jacinda Ardern's Govt slashes fuel taxes from midnight; half-price public transport .

Kiwi motorists will get some relief from soaring petrol prices, with the Government slashing fuel excise duties and road user charges by 25c a litre each from midnight ، But one major fuel company has jumped the gun, announcing it will impose the price reduction immediately.

Mobil said it would not wait until midnight, instead reducing prices across all petrol grades by the same amount straight away ، Mobil lead country manager Andrew McNaught said the company wanted to give "some immediate relief" to motorists as they drove home tonight.

"The cost of living has been having a significant impact on many households, and we want to do our part to help reduce those impacts, which is why we are dropping our prices immediately," he said ، Prime Minister Jacinda Ardern described the current situation as a "global energy crisis" after Russia's invasion of Ukraine.

Cabinet had decided today to reduce fuel excise duties and road user charges by 25c a litre each, for the next three months. The change takes effect from 11.59pm tonight ، All public transport fares will also be halved from April 1 for three months ، "We are in a wicked perfect storm," Ardern told reporters at her post-Cabinet press conference.

We expect continued volatility, and this affects everything ، However the Government says it is "too complicated" to remove GST from fuel prices ، Finance Minister Grant Robertson said tinkering with GST would be increasingly complicated ، "It's a massive administrative job to play with GST."

Ardern said the changes announced today were quickly achievable ، This year's Budget in May would address longer-term issues around energy independence and a move away from fossil fuels ، Robertson said Cabinet wanted to support people through the global energy shock.

Fuel price changes 'within hours' ، The reduction in fuel excise duties would take effect from 11.59pm tonight ، "We cannot influence the global oil price," he added, but local fuel excises could be amended ، "It means that we can take this action within hours," Robertson said.

"For most taxes, it ordinarily took months to affect any change ، The Russian invasion added to existing global inflationary pressures, Robertson said ، On road user charges, it is a more complex picture ، Reduced public transport fares should help cushion the blow some families faced from surging living costs, he said.

A vast array of different road user charges complicated attempts to make changes in that area ، Fuel excises went directly into a transport fund which was "always well over-subscribed" due to decades of underinvestment in roads and related infrastructure ، Robertson said today's fuel excise cuts and transport subsidies were affordable.

The Treasury estimated the reduced fuel excises would cost about $350 million ، Money would be reprioritised from a Covid-19 fund to make up the shortfall ، The wind-down of managed isolation facilities had freed up some public money.

Energy and Resources Minister Megan Woods said she spoke with fuel company chief executives today, and most were willing to take steps to reduce prices for consumers from tonight ، Fuel industry profits would be monitored, and data made publicly available.

"There are options to pursue more data disclosure," she added ،Woods said she was working with other energy ministers worldwide to monitor the energy crisis and take possible remedial action.

Robertson said he wouldn't want to presume what a normal energy price was, but the latest steps from Cabinet should help stabilise prices ، "There is no issue with physical supply. It's all about price in New Zealand," Woods added.