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Independent fuel retailer Gull is warning that the Government's proposed emissions trading scheme could hurt its profits to the point where it reconsiders operating in New Zealand.
Gull general manager Dave Bodger yesterday made the comment during a marathon select committee hearing on controversial legislation which will bring
in a trading scheme to reduce greenhouse gas emissions.
Mr Bodger said Gull operated on "wafer-thin" profit margins and, unlike its major oil competitors, had no experience trading in carbon markets anywhere.
"Our opposition are some of the most substantially resourced and largest companies of any type in the world," Mr Bodger said.
"They already operate in emissions trading schemes."
Europe's emissions trading scheme had been in the minds of the world's largest oil companies for some time, and Mr Bodger said they had an advantage of scale and experience when it came to carbon trading.
Gull operates only in Australia and New Zealand.
"They'll have access to international markets in which we don't operate, in which carbon is traded," Mr Bodger said.
"There will be discounts on those purchases worldwide that we will not be able to obtain, and they'll have significantly lower brokerage fees."
Gull's viability came down to fractions of a cent per litre of fuel, and there was a concern that the advantage the major oil companies had over Gull or any other independent would affect profitability, he said.
Small differences in the price paid for carbon could translate to cents per litre at the pump, and if Gull was forced to discount to compete it would potentially be in trouble.
"There's a risk that we might become uncompetitive under the emissions trading scheme as proposed, and we may choose no longer to operate in New Zealand if we are uncompetitive."
Gull, which markets itself as a consumer-oriented company that tries to keep overall prices down, expected the price for fuel overall in New Zealand to rise if it was forced to leave the market.
MP Charles Chauvel, who chairs the select committee examining the legislation, suggested that Mr Bodger was not necessarily looking for special treatment for Gull - but rather some kind of mechanism to prevent predatory pricing early in the scheme.
Mr Bodger agreed, and said the main issue was the fragility of the market when it first got up and running.
Once the market was mature, Gull could deal with its movements and compete actively much the same way it did with fuel prices.
DECISION TO POSTPONE FUEL TAXES LAUDED
New Zealanders like the Government's moves this week to postpone an emissions price on their fuel use and to phase in regional fuel taxes, says a poll taken since Tuesday night.
However, support for the fuel tax deferments policy turns into opposition if it means less money is available for personal tax cuts and spending on social and transport improvements.
Business Council for Sustainable Development chief executive Peter Neilson says the survey shows people are adamant that action is needed on climate change and that the carbon emissions trading scheme is required to lower emissions.
"However there is still considerable debate over who should pay and a desire that taxpayers pay as little as possible and for as short a time as possible, consistent with not exposing our large emitters to unfair overseas competition."
The ShapeNZ poll of 2034 respondents has a margin of error of 2.2 per cent and is a representative sample of the population.
It found 79 per cent were concerned about climate change, compared with 82 per cent in February, and that 48 per cent wanted the country to be a global leader on climate change, compared with going at the same pace as other countries (38 per cent), or doing as little as possible (11 per cent).
Asked if there should be an emissions trading scheme, 57 per cent agreed, 29 per cent disagreed and 13 per cent did not know.
But only 1 per cent support the present policy of taxpayers covering the cost of 90 per cent of business emissions at 2005 levels until 2017 (previously 2012) before support phases out by 2030.
Half support this week's new policy requiring councils to phase in any regional fuel tax of up to 10c for transport projects. Support drops to 31 per cent if it would delay improvements.
