Recently, the Labour Party introduced a regional fuel tax on Auckland motorists. With all the discussion on fuel prices, we’ve broken down the different components that make up the price that rings up at the petrol station.

You’ll be surprised to know that the price paid for the actual fuel itself is only around 60 cents per litre for petrol and 61 cents per litre for diesel. With shipping costs of around 4.1 cents, this brings the cost of petrol to 64.1 cents and diesel to 65.1 cents.

From here, the government adds National fuel taxes (also known as the excise tax) – this is only applied to petrol. These total to 66.48 cents per litre. The national fuel tax is made up of a variety of funds, levies and taxes. The National Land Transport Fund is the major contributor to the cost here, and makes up 59.52 cents of the excise tax. You also contribute towards Accident Compensation Corporation (ACC) levies at 6 cents a litre, Petroleum/Engine Fuel monitoring levies at 0.3 cents a litre, and Local Authorities Fuel taxes of 0.66 cents a litre. After this excise tax, both diesel and petrol drivers contribute 2.6 cents per litre towards the Emissions Trading Scheme levy.

Once the excise tax is added, the cost of petrol goes up to 133.18 cents per litre. After this, retailers are able to add their mark up, and finally GST is levied on the total. The GST collected (15% of the total cost) is also applied on the excise tax – essentially a tax on a tax.

This is why fuel across the country can cost upwards of $2 a litre. However, with the introduction of the regional fuel tax in Auckland, an extra 10 cents per litre (on both petrol and diesel) is added to the total cost of fuel. This has seen fuel cost over $2.20 a litre at petrol stations in Auckland, resulting in motorists having to pay significantly higher costs on fuel than in the past.

Petrol stations near the city boundaries, such as in Northland and Waikato, now have prices significantly lower than petrol stations just a few kilometers down the road from them.

In the next three years, the government is planning on increasing the nationwide excise tax (currently at 66 cents per litre) by another 12 cents, which would bring the total excise tax to 78 cents per litre.

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