Government not budging on fuel tax hikes as prices soar

Fuel prices have soared to new highs but the Government is showing no enthusiasm for surrendering its cut by reducing fuel taxes or putting off the introduction of higher taxes.

National Party leader Simon Bridges said fuel prices were concerning and the Government was contributing to the problem with proposed fuel tax hikes.

"What we are seeing here is the cost of living really rising. This is serious. $2.30 or thereabouts is as high as it's ever been and I'm very critical of the Government that at a time when they've got a massive surplus, where they're awash with cash, they're going to be raiding New Zealanders for yet more."

He would not be drawn on whether the Government should reduce the taxes, but did say "they certainly shouldn't be heaping on more".

Aucklanders face an extra 11.5 cents a litre from July 1 and the Government also plans to phase in increases of 3-4 cents a litre a year over the next three years to pay for transport projects.

It comes as fuel went up to $2.30 a litre for 91-octane fuel at some stations this week – the highest on record and a spike fuel companies have put down to increased international prices. The previous high was $2.27 in mid-2013.

Asked if the Government would look at the fuel taxes in light of the increase, Finance Minister Grant Robertson said the focus was ensuring anti-competitive behaviour was not contributing to ratcheting up the price.

"That's exactly why we are beefing up the powers of the Commerce Commission, so they can do the market studies that identify what is actually going on here. We've had a problem, in that we haven't been able to get to the bottom of this, haven't been able to get the information we need."

Asked about the impact of new US sanctions against Iran on international prices, Robertson said there were some things the Government had no control over.

"But I think what New Zealanders need to know is that if there is anti-competitive behaviour going on that we stamp down on that."

Z Energy spokeswoman Sheena Thomas told Newstalk ZB the price increases were a result of rising international prices. Oil rose to its highest level since 2014 last week after US President Donald Trump announced the US was withdrawing from the Iran nuclear deal and would impose new sanctions.

The Government is giving the Commerce Commission new powers to compel petrol companies to provide information on pricing. Legislation for that is before a select committee.

Energy Minister Megan Woods said she was working with officials to see what the Government could do until those new powers came into effect, but most of the solutions required it to have the information it would get through those new powers.

"We are really concerned. We want reassurance that people are paying a fair price when they fill up their cars and we are doing the work to make sure we have all the information we need to give people those reassurances."

"The price hikes we are seeing are exactly the reason we are pushing ahead to get the market study powers, because I think every New Zealander feels concerned when we are seeing price rises like that, particularly in Wellington and the South Island."

Bridges has said National would repeal the regional fuel tax.