Source: Radio New Zealand
“I have deep sympathy for diesel users because diesel is the fuel globally that has been most disrupted by the Middle East conflict,” the Finance Minister says. Samuel Rillstone/RNZ
Nicola Willis has ruled out reducing the cost of road user charges to give some reprieve to diesel users.
The price of diesel has increased so much in the past week, as a result of the Middle East conflict that has pushed up the price of oil, that it’s now the same price as 91 unleaded petrol.
While the government excise tax is part of the price of petrol, diesel users pay their tax through road user charges (RUCs).
With diesel now on a par with petrol, the additional cost of RUCs has pushed the price of operating a diesel vehicle well beyond that of a petrol car.
The Finance Minister told RNZ on Tuesday she has sympathy for diesel users but there are no plans to reduce the price of road user charges.
“We’ve chosen not to take that measure,” Willis said.
“What we’ve said as a government is doing that, having a reduction in that tax, it would not be temporary, timely, or targeted.
“In fact, it would most likely benefit those on higher incomes and higher fuel users more, and it would potentially directly contradict other measures where we’d have to move into another response phase where we’re trying to encourage people to use less fuel,” she said.
For now the government has chosen to supplement the incomes of families with young children on lower incomes, “and we stand ready to offer other forms of support should we judge them to be prudent, timely, and necessary,” Willis told RNZ.
“I have deep sympathy for diesel users because diesel is the fuel globally that has been most disrupted by the Middle East conflict.”
Willis said the decision not to reduce excise tax came down to a matter of fairness.
“We have a fairness principle in New Zealand that road users contribute equally to the maintenance and funding of roads. We have a different mechanism for achieving that for petrol users from diesel users, but if we were to do something for diesel users, petrol users would fairly ask why they’re not getting it.”
Diesel costs were causing hardship for a lot of families, firms, contractors, and agricultural businesses, Willis said, “and I hear them loudly”.
While she’s ruled out reducing the price of road user charges, Willis told RNZ her focus would remain on ensuring diesel continued to be available and that New Zealand contributed to global efforts to see the price of diesel stabilise in the future.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
