Prime Minister Jacinda Ardern has launched a scathing attack on fuel companies, telling reporters she thinks "consumers are being fleeced" at the petrol pump.
"I am hugely disappointed in the level of price that consumers are currently paying at the pump for fuel," she said at her weekly post-cabinet press conference today.
National Leader Simon Bridges has been critical of the Government and its fuel taxes which he said is pushing the price of petrol up.
"Unlike petrol, talk is cheap. And the Government is a big part of the reason why petrol prices are so high."
Petrol prices are creeping up to $2.50 in some parts of the county.
Ardern came out swinging, pointing the finger at fuel importers – such as Z Energy, BP, Mobil and Gull – and their margins.
"Between 2008 and 2017, the margins importers were taking for themselves more than doubled from 7 per cent to 16 per cent.
"That increase represents a transfer of wealth from petrol consumers to producers, to the tune of hundreds of millions of dollars a year."
Between October 2017 and September this year, petrol prices have risen 39c – Ardern said just 6.8c of this was tax.
But 9.8c of that was down to the margin from importers, she said.
"I do not see that as acceptable."
In fact, she said that pre-tax, New Zealand has the highest cost for fuel in the OECD. In 2008, New Zealand had some of the lowest.
Given the concerns about "anti-competitive behavior" in the fuel market, the Government has prioritised the passing of the Commerce Amendment Bill.
This bill would amend the Commerce Act to enable the Commission to undertake market studies.
Once the bill is passed, Energy Minister Woods has signalled that she intends to ask the Minister of Commerce and Consumer Affairs Kris Faafoi to request the commission to conduct a market study into fuel markets to better understand how the market is functioning.
"I will nominate the fuel markets as a priory area," Ardern said.
Ardern is anticipating the bill to be passed in two weeks' time.
The study will report back next year, and the Government will prioritise a response to what the Commerce Commission finds.
In the past, some petrol companies have not played ball with the Government when asked about their margins.
"That is why we are passing legislation that will allow us to take a full market study, and will require full market co-operation," Ardern said.
"They haven't opened up their books to us in the past; so we're going to have to force their hand."
Bridges said the Government should axe its fuel tax increases to provide immediate relief to motorists.
"[Ardern] is saying consumers are being 'fleeced' while her Government is driving up fuel prices and taking hundreds of dollars from Kiwi households through higher taxes on fuel.
"The [Commerce Commission] inquiry will take months and any resulting changes could be years away. Meanwhile New Zealanders are paying record prices for petrol and the Government is collecting hundreds of millions of extra tax [dollars] from them."
But Ardern said the Government's excise tax has been just a "small part" of the petrol price increase.
"Even if we did remove [the excise taxes] I cannot guarantee that fuel companies would not simply absorb that themselves and consumers would pay the same price."