Source: Radio New Zealand
Interislander is hiking its fuel surcharge to 54 percent on commercial vehicles and trucks crossing the Cook Strait. Wikimedia Commons
Crossing the Cook Strait is about to get a whole lot more expensive for commercial operators and likely consumers.
The Interislander is hiking its fuel surcharge to 54 percent on commercial vehicles and trucks crossing the Cook Strait due to soaring energy prices.
International shipping company Maersk announced its own 27 percent fuel surcharge, and Bluebridge adjusted its prices last month.
Retail New Zealand chief executive Carolyn Young told RNZ that any increase in transporting costs will flow through to the till.
“It’s realistic to expect that the consumers will see increased prices, and obviously any increase in price is inflationary. We know the inflation factors are expected to be significantly higher than where we sit right now by the end of the year,” she said.
The near doubling of the fuel surcharge for commercial vehicles will apply to all sorts of companies – from livestock trucks, to groceries, furniture and goods.
Marcus Pickens from Wine Marlborough said it was creating more uncertainty with pricing.
“There’s a lot of pricing work going on week to week now, it’s not set in advance and everyone is reviewing things continuously.
“It makes it hard to price up those products and work out where the margin sits for everyone, it’s adding complexity for sure,” Pickens said.
While some people are holding off on shipments, that’s not possible for everyone.
“If a product is not super urgent they can, but there’s a lot of product that needs to be continuously supplied to keep shelf space full on shelves and in shopping trolleys around the world,’ he said.
The New Zealand Shipping Federation told RNZ the Cook Strait ferries are spending about $600,000 a week more on diesel than before the Middle East conflict.
Transporting New Zealand chief executive Dom Kalasih agrees consumers will see price increases – and said it would take about a month to come through the system.
“We’d have to be naive to think costs won’t be passed on. A good demonstration of this is we are seeing this in other areas too, I’ve recently seen some information from the building sector where fuel is used in a lot of cases.”
KiwiRail and the Minister of Rail Winston Peters declined to be interviewed – but in a statement Peters said Interislander should not be expected to absorb fuel price increases.
Matthew Lane, who is chief executive of the retailer Night ‘n Day, said suppliers were passing some of the fuel increase onto them.
“The majority are doing more a temporary increase which is encouraging because they’ve quantified it. So as petrol prices go down the prices go down accordingly, which means we all, in theory, end up at the historical retail prices and cost prices that were previously in play,” Lane said.
It’s exactly what Retail NZ wants to see from all businesses – ensuring if, or hopefully when, fuel prices drop – so too do the charges being passed onto consumers.
“We need to note when this charge is put in place and how we get back to normal, so that when prices come back we don’t only come partly back. We need to be really clear and transparent around that,” Young said.
KiwiRail said it was monitoring the situation and making every effort to absorb cost increases across a monthly period to provide certainty for customers.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand