The AA is warning the public mood will turn "really dark" if Auckland motorists aren't seeing any benefits of the regional fuel tax by the end of the year.

Aucklanders will be hit with a 11.5c a litre rise as soon the regional fuel tax comes into effect on July 1, with petrol companies saying they will be passing the full increase on.

And there will be more pain when prices rise by as much as 4c a litre again on October 1 if the first round of three national fuel excise increases is implemented following a policy statement announcement at the end of June.

The Government has indicated the increase will be 3-4c every year for three years.

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Worries have been raised about the impact on Aucklanders and especially the city's poorest.

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A clear majority of 13 to 7 councillors voted in favour of implementing the regional fuel tax today, but a south Auckland councillor who voted against it raised concerns the poorest residents would be hit hardest.

Auckland Council voted to approve the regional fuel tax, which will take effect from July 1 once it passes through Parliament.
Auckland Council voted to approve the regional fuel tax, which will take effect from July 1 once it passes through Parliament.

The tax, which adds 10c to every litre of fuel sold in Auckland plus GST, was approved by councillors at a budget meeting today, which will now go to Parliament for approval.

AA spokesman for Auckland transport Barney Irvine said the double-whammy of the two taxes was a lot to ask of Auckland motorists.

"I don't think anyone's very happy about having to pay more at the pump but I think most Aucklanders would look at this and say 'okay, if it's going to help improve the transport system I'm prepared to pay for it, albeit grudgingly'."

The AA was worried the mood among motorists would turn sour if tangible improvements to Auckland's congestion weren't noticeable by the end of the year, Irvine said.

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Big projects would obviously take longer, but Irvine wanted to see small improvements like smart traffic lights and adjustable median barriers implemented within six months.

"If they don't the public mood is going to be really dark."

The AA is calling for a 12 month review of the regional tax to make sure it is working as intended and that companies are not "price spreading", a practice where the price of fuel was hiked by less nationally to keep prices competitive in Auckland, the country's largest fuel market.

Irvine said the AA also didn't want the Government to lose sight of the possibility of implementing a congestion tax in future - an alternative tax which was less "blunt" than an across-the-board tax hike.

If the regional fuel tax wasn't seen to be improving on Auckland's congestion problem quickly the public mood could turn
If the regional fuel tax wasn't seen to be improving on Auckland's congestion problem quickly the public mood could turn "really dark", the AA's Barney Irvine said.

Worries tax increases will hit the poorest hardest were raised during today's vote.

Manurewa-Papakura councillor Daniel Newman, the only councillor to advocate for higher rates as the way forward, said the tax would lead to a redistribution of wealth from some of the poorest people to those who have the greatest wealth and choice.

"I don't think that is fair," he said.

Petrol companies spoken to by the Herald today said they would be passing on the full cost of the regional fuel tax immediately, either at the pump or in wholesale fuel prices.

"10c a litre is not something I think anybody could absorb overnight," Gull boss David Bodger said.

"The Government's decided Auckland needs more money and they need more money and we will unfortunately be passing that on to the poor motorists."

BP and Z Energy, which also owns the Caltex brand, would be passing on the full amount of the tax to consumers which was standard practice, spokeswomen for both companies said.

BP 2Go stations like this one are independently owned and set their own retail prices, but the company will hike the cost of its wholesale fuel to owners.
BP 2Go stations like this one are independently owned and set their own retail prices, but the company will hike the cost of its wholesale fuel to owners.

BP 2Go and Caltex stations are independently owned and operated and owners would set prices at their discretion, but the price of wholesale fuel would be bumped up by 11.5c a litre.

All BP Connect and Z Energy stations would have their set on July 1 to reflect the tax increase immediately.

"We run a high cost, low margin business, so there's no buffer in our profit margin to reasonably absorb an increase such as this," Z Energy spokeswoman Sheena Thomas said.

In response to questions about price spreading, BP spokeswoman Leigh Taylor said beyond the first implementation of the tax "market forces" would dictate the price.