Small business owners and average income earners in Tauranga are feeling the pain at the petrol pump as fluctuating fuel prices - which recently hit record highs - strain budgets.

Tauranga transport companies and tradies have reported big hits to their bottom lines, while a budget adviser says average people are raiding grocery budgets to pay for petrol.

"It hurts," said courier company owner Ian McGonigal, who drives from Tauranga to Gisborne and back each day, on rising diesel prices.

"It used to cost me $50 to $55 a day 12 months ago, and now it would cost me $80.


"I have had to increase prices to compensate.

"I think the oil companies are ripping us off."

AD Electrical owner Andre Buitendag said increases were cutting into profits.

"Some of it can go back to customers but I have prearranged contracts with set mileage and I have to absorb the cost."

One four-year contract had mileage at $1 for diesel, which now cost $1.50.

Two Tauranga moving company owners said they had put hourly rates up - $5 and $10 an hour - due to increased diesel prices and a road user charges.

Mover Allan Crossley said he was dialling down petrol consumption at home, too.

He was thinking about trading in his Ford Falcon for a hybrid "just to save some fuel" and seeing his daughter in Hamilton less.


He said the Government was "not helping the situation" by increasing fuel taxes.

Motorist Paul Anderson said prices would have dropped if Kiwis had not just become used to paying $2 a litre.

''We think we are getting a deal but we're still getting ripped off.''

Kirsty Morrison of One21 Recruitment said she advised job seekers looking at a role across town to consider petrol prices, transport and traffic before taking it.

Tauranga Budget Advisory Service manager Diane Bruin said the increases were especially hard on average workers who were not on bus routes and could not car pool.

"Food would be the initial hit of accessible money as it is usually what is left, however, this is really stretching an already stretched budget."

The Ministry of Social Development said rising living costs were reflected in a rise in demand for emergency grants.

Anyone struggling to afford to get to work should get in touch.

Minister for Transport Phil Twyford said fluctuations in the global crude oil price had a far bigger influence on New Zealand petrol prices than minor excise increases.

The international price of crude oil has risen by more than 40 per cent this year, while 2018 excise increases will cost the average household 83 cents a week - 40c for those on the lowest incomes.

The funding would allow $5 billion more in transport investment over the next decade to "get our cities moving, create new economic opportunities in our regions, and save lives on our roads".

The Government wanted to see a competitive market for petrol so Kiwis were not paying more than they had to, he said.

''We are concerned that the margins of fuel companies have increased over the last three weeks to record levels. We've passed a law that will allow the Commerce Commission to compel petrol companies to provide information on pricing.''

Representatives of BP, Z, Mobil and Gull all said their fuel was priced competitively and increases were largely due to factors outside their control, particularly the price of crude oil and the New Zealand exchange rate.

Over the last few weeks, crude oil prices had dropped and those savings had been passed on to customers at the pump, they said.

The general manager of Gull NZ, Dave Bodger, was scathing of Twyford's claim of increased margins, saying the minister did not have reliable data on which to make that claim.

"I fear the minister is confused. Over the last three weeks, our margins haven't gone up."

He welcomed the Commerce Commission inquiry, provided it was even-handed and surveyed the industry as a whole.

He described government fuel taxes as "the poisoned cherry" on the cake.

New Zealand Taxpayers' Union executive director Jordan Williams said politicians cried crocodile tears about pain at the pump when most of it was caused by tax hikes.

''What makes petrol taxes particularly loathsome is they are regressive – disproportionately hitting the poor and those who can least afford it.

"While alternative transport options might apply in our large cities, for much of regional New Zealand there is no choice."

- Additional reporting Samantha Motion

AA Petrol watch on fuel prices

- In the last fortnight prices for 91 dropped from the near record highs of $2.49 per litre
- Whether prices would continue to fall "remains to be seen"
- Government taxes accounted for about 43 per cent of the retail price or $1.07 cents a litre
- Fuel prices influenced by exchange rates and the cost to buy and import the product.

National fuel prices as at October 25:
91 Octane - 238.9
95 Octane - 247.9
Diesel - 177.9

National fuel prices as at September 24:
91 Octane - 240.9
95 Octane - 249.9
Diesel - 180.9

- Source: AA Petrol Watch