Auckland fuel sales both fall by 7 percent since tax introduced

6:52 pm on 4 October 2019

Aucklanders have bought less fuel since the regional fuel tax came in, with both petrol and diesel sales falling more than 7 percent in the year since the tax was introduced.

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Photo: 123rf

The tax, which adds 11.5 cents to every litre of fuel sold in Auckland, raised $156 million in its first year, from July 2018 to June 2019, a little more than the $150m projected.

In the same time public transport patronage rose 9 percent, and topped 100m trips on buses, trains and ferries. Bus trips were up 10 percent, rail up 6.4 percent, and ferries 4.4 percent.

That's exactly what the mayor wanted - less driving, more public transport use, and the money to fund new infrastructure. But others are critical of the effect the fuel tax has had on the price of goods and on people who are struggling financially.

Almost $90m of the $156m in revenue has already been allocated to transport projects - including $24m on the Eastern Busway and $20m on road safety. The tax revenue contributes towards a wider, decade-long $28b spending plan with central government - improving roads, public transport, and walking and cycling.

Auckland Mayor Phil Goff said he's pleased that the number of trips on "rapid" public transport - trains and on busways that do not compete with traffic - rose 21 percent.

"We know that as the population increases towards two million people, you can't just keep widening every road and motorway.

"We've got to look at better, more effective, more convenient alternatives. Getting that mode change to public transport and other forms of transportation I think has been really important."

At 11.5 cents per litre, the fuel tax adds about $6 to the cost of filling a 50 litre tank. Someone filling up once a week would be paying around $300 a year more with the tax.

For the council to get the same amount of money as they do from the fuel tax, general rates would have had to increase 10 or 11 percent, Treasury wrote before the tax was passed.

Auckland councillor for the Manukau Ward Efeso Collins supports the shift towards public transport, but voted against the regional fuel tax. He said it's a regressive tax and hurts his constituents disproportionately, some of whom are struggling to get by financially anyway.

"Our people don't normally talk, and the poor don't normally complain. So our people just wear what they have to wear - if it means they're having to pay extra in fuel costs to get their kids to school then they'll just wear that as much as they can."

Mr Collins said public transport should be cheaper, and free for children and community service card holders - with the ultimate goal of free public transport for everyone.

Diesel sales in Auckland were also down 7 percent.

Nick Leggett, now the chief executive of the trucking industry's Road Transport Forum, said the tax adds another cost to food and goods, which is passed on to the consumer.

"I have heard of stories where businesses have instructed drivers to fill up at a new point, which is outside of the Auckland area," Mr Leggett said.

"The point is that adding costs to fuel adds costs to every good and product that comes on the back of a truck."

Nationwide, food prices rose less than 0.9 percent in the year to July - less than inflation - but it's not known how much that rise was specifically in Auckland.

Transport commentator Matt Lowrie said as evidenced by faster-than-expected growth in public transport, the tax may have given people an encouragement to get out of the car.

"Sometimes it just takes a little bit of a push to get people to try an alternative, and once they try it they realise 'it's actually not as bad as I thought it was' and they keep using it from then on. There are a number of places around the world we can point to where we've seen that happen," Mr Lowrie said.

Some of the larger benefits resulting from the fuel tax will not be seen for years. For example the biggest allocation from the tax so far - stages 2-4 of the Eastern Busway - will not start construction until 2022, but other smaller projects are already underway.

The prime minister's ruled a regional fuel tax out for any other region under her leadership.

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