Barry Soper: The hypocrisy of the Govt's petrol tax position

Cabinet's energiser battery Megan Woods seems to dart from one crisis to the next, whether it's sorting out and sacking those associated with issues still to be cleared up in her home town of Christchurch to bringing the big oil companies to heel over petrol pricing, this diminutive do-gooder always appears to be in distress.

At least on the surface it seems she's well suited for the energy portfolio and regenerating her home turf.

But putting the British Petroleum oil company boss on her Beehive mat would appear to be something over an over-reaction and runs the risk of this Government again sending the wrong signals to business.

Dr Megan Woods.

Her frenzy was triggered by a media story of a BP pricing manager sending an email increasing the price of petrol at three southern North Island sites because a fourth in the same region was suffering from falling sales.

It was a tactic, the manager explained, that had worked before.

It worked because competitor Z saw the prices it could get away with and increased theirs too. So everyone was making more money which is generally what a company's in business for.

Waving the big stick at the oil companies may appease the long-suffering motorists who pay wildly varying prices for exactly the same product, depending on which part of the country they live in. That's where the explanation's needed.

But while they're at it, the Government itself could indulge in a bit of navel gazing and explain to motorists why they're paying almost half the cost of petrol at the pump into their coffers, an excise tax that's set to grow under Labour by between nine and 12 cents a litre over the next three years.

It would seem somewhat hypocritical for the Beehive then to bash the oil companies when they're in the business of reaping the benefit of petrol sales themselves. Goodness knows what they'd do if we all went electric!

At least the excise on petrol now goes into the National Land Transport Fund for investment back into the system. That wasn't always the case.

Petrol landing in this country costs about 60 cents a litre with the oil company margins around 50 cents. And of course we'll be importing more of it with future oil exploration recently banned by the Beehive.

The motorists' champion, the Automobile Association, have argued for yonks that the 15 per cent GST take shouldn't apply to petrol with the solid argument that, when it's applied to the 70 cents a litre excise portion of what we pay at the pump, it's nothing more than a tax on a tax.

It's plain and simple double-dipping.

So Megan Woods' fist-pumping would seem to be more about putting on the style for the motorist rather than substance.