Prices at petrol pumps hit record high

Petrol prices are at a record high today after the Government lifted its tax take by 5.63c a litre overnight - and more increases are feared.

A 5c rise in petrol excise and an average 24 per cent increase in road-user charges for light diesel vehicles are expected to yield an extra $207 million a year for new roads and public transport infrastructure.

This is before counting goods and services tax on the increases, including 0.63c for petrol.

The petrol rise was set to push the price of 91-octane at main-centre pumps to about 129.5c, and of lesser used 96-octane to almost 135c, amid fears of even higher increases now the New Zealand dollar is losing ground against the United States greenback.

Automobile Association public affairs director George Fairbairn exhorted motorists yesterday to fill up before the increases kicked in, saying fuel was "unlikely to be cheaper than it is today".

He fears the price of 91-octane will soon clear 130c - compared with the previous record 125.9c in October.

His message was not lost on many homeward-bound motorists last night, including a man who had filled his vehicle earlier but returned to a queue at BP's Herne Bay service station with an extra container for fuel for his boat.

Although he believed the tax rise was justified, others strongly disagreed.

"It's terrible, unfortunate. I don't think they needed to do it," said Trudy Meredith, of Glenfield.

Herne Bay resident Andrew Bowker was similarly unconvinced, but said he hoped the extra revenue would go towards fixing Auckland's roads.

Petrol stations last night said they had been busy all day as motorists filled their tanks to beat the price increase.

Dinesh Kangi, owner of Caltex Howick, said there had been a stream of cars coming in since opening at 6am.

Sur Venani, cashier at Mobil Glen Innes, said: "People were filling their tanks like there's no tomorrow."

The Taxi Federation is already recommending that its members raise fares by about 5c a km to cover the tax rise and increases in petrol prices of about 10c a litre since January.

Shell Oil spokesman Simon King said the industry was reluctant to lift the price of 91-octane over a psychological bar of 130c, but was under "huge pressure" from production costs.

This was reflected by a shortlived bid by BP on Wednesday to jump the gun on the tax rise and raise its petrol prices by 2c a litre, which it abandoned after failing to tempt other oil companies to follow.

Spokesman Jonathan Hill pointed to a 3c drop in the value of the dollar against the greenback within three weeks, at the same time as continuing increases in the cost of crude oil.

The extra annual cost to the motorist of the tax rise is expected to range from about $56 to $84, depending on the size of vehicle driven.

This is based on an AA estimate that the average motorist drives about 14,000km a year, and average consumption by 12 to 14 vehicles in each of four engine sizes.

It would cost about $1293 a year at today's price of 91-octane petrol to fuel a car of 1300cc or smaller, which the AA estimates uses an average of 7.13 litres for every 100km driven.

This rises to $1296 for cars up to 1600cc, $1506 for those up to 2 litres (2000cc) and $1940 for larger vehicles including four-wheel-drives.

Customs Minister Rick Barker told Parliament last year that the tax rise could add about $83 to the average household's annual outgoings.

Last night's increase pushed the total portion of taxes, levies and other Government charges on petrol to 61.36c a litre, with the oil companies taking just over 68c for 91-octane.

- additional reporting Derek Cheng