The rising price of diesel has cost one company an extra $87,000 in six months, with the fuel more expensive than petrol at one Bay of Plenty service station this week.
A business leader said diesel was cheaper than petrol for years, which drove many to buy diesel vehicles. But now, by his calculations, diesel car drivers paid an average of 91 cents more per litre.
One fuel company said diesel and petrol costs spiked after the Ukraine conflict and, while petrol had come down, diesel had stayed at "extreme levels".
Another recently attributed the costs to "constrained global refinery capacity" and a "tightened diesel market", and said it made up to 50 price changes daily based on overhead costs or local competition, so prices may vary between towns.
In 2020 there were more than 4.4 million registered motor vehicles in New Zealand, with diesel vehicles making up about 20 per cent of these, according to Ministry of Transport fleet statistics.
On top of 'at the pump' prices, diesel vehicle owners also pay Road User Charges (RUCs) per kilometre.
On Wednesday, the cheapest diesel in Tauranga was $2.39 at Gull Speedlane on Hewletts Rd while 91 petrol was $2.28, according to Gaspy.
The most expensive diesel was $2.64 at BP Connect Tauriko while 91 petrol was $2.53 at the same location.
In Rotorua, the cheapest diesel was $2.51 at Gull Lake Rd while petrol was $2.49.
The most expensive diesel was $2.69 at three BP locations while 91 petrol was 9c to 13c cheaper at the same locations.
Chief executive of Rotorua-based Patchell Group, specialist transport trailers and equipment manufacturers, Brent Whibley, said diesel cost the company an additional $87,000 in the first six months of this financial year compared to the same time last year.
"The impact also has a general inflationary level, so requests from staff for increased wages to cover higher cost of living."
Whibley said it was also assuming it was included as a component in its overall price increases across the whole supply chain.
Tranzliquid director Greg Pert questioned whether the belief by Governments that "we no longer need oil and gas and that wind and sun will power everything" will we see an energy crisis as winter looms in Europe and the US.
He believed there was a lack of an energy transition plan which had not helped, and more costs would be passed on to consumers as the country "walks to a potential recession".
"I think some of the green ideological ambitions of the Government, and the rush to change will have major impacts on costs to society for years."
The company, based in Mount Maunganui, transports fuel or fuel-related products throughout New Zealand and he was "always intrigued by the variances" in fuel prices.
"We only transport fuel to service stations and commercial activities; how fuel sites price fuel is entirely up to them in a commercial world."
He acknowledged the Government had offered relief to the industry via a reduction of road user charges (RUC) which are due to be reinstated to full price in January next year. Extending this may ease some pressure, he said.
Rotorua Business Chamber chief executive Bryce Heard said the price of diesel had not gone unnoticed.
"There has traditionally been a price premium at the pump, of approximately 75 cents per litre for 91 petrol over and above the price of a litre of diesel. This has been consistent for years.
"This differential has driven many motorists to buy a diesel vehicle."
Heard said, in doing so, motorists took a conscious decision to bear the additional costs of AdBlue - a fluid automatically injected into a vehicle's exhaust system to help reduce emissions of nitrogen oxides from the vehicle's exhaust - to remedy the diesel emissions.
"Coinciding with the advent of rising costs, the margin between diesel and petrol has virtually disappeared and it appears that some somewhere in the chain of costs, price setting, and/or taxes - is benefitting from the current instability and mood of negativity surrounding diesel fuel."
By Heard's calculations, it meant "average" diesel car drivers were paying an extra 91 cents per litre.
Chief executive of Western Bay of Plenty economic development agency, Priority One, Nigel Tutt said that as with other types of cost increases, businesses would pass higher fuel prices on to consumers if they could.
Tutt said transport-related businesses also have the additional costs of roading congestion which increased capital and labour costs.
Tutt said it expected diesel vehicles would be replaced by hydrogen-fuelled vehicles but anticipated this being a "slow burn" over several years.
Rotorua Budget Advisory Service manager Pakanui Tuhura said diesel price increases impacted middle-income or higher-income families as those who could afford diesel vehicles tended to have a steady income.
He said these households may be pushed towards electric vehicle ownership, use their diesel vehicles less, not keep up their RUC, or use alternate transport like work vehicles or carpooling.
He said the cost of diesel and RUC made it the most expensive fuel and people needed to decide whether to take action.
Tauranga Budget Advisory Services manager Shirley McCombe said people often focused on the purchase cost and did not factor in costs of fuel, servicing, tyres, warrants and insurance.
"The cost of changing vehicles is the challenge and the two need to be weighed up."
Gull general manager David Bodger said there was a spike in diesel and petrol at the beginning of the Ukraine conflict.
While petrol has returned to pre-conflict levels, "diesel remains high at record extreme levels".
Z Energy acting communications manager Kiri Shannon said it recently increased diesel prices as a result of constrained global refinery capacity and a tightened diesel market.
Shannon said Z's fuel pricing was localised and it made up to 50 price changes daily outside any nationwide move, meaning prices could vary between stations within regions or towns.
This was based on a range of factors including overhead costs or local competition. Prices were set by head office, not by individual service stations.
A BP spokesman said it reviewed prices daily to ensure competitiveness in the market.
A Waka Kotahi, NZ Transport Agency spokesman said diesel was not subject to National Land Transport Fund tax as RUC payments go toward the fund.
Earlier this year, the Government announced a transport package which included a 36 per cent cut to RUC rates from April 21 to the end of January.
Under this RUC relief, Type 1 powered vehicles with two axles - which are the most common for everyday households - would pay between $49 and $225 per 1000km.
Type 1 vehicles are categorised in four weight bands, from not more than 3.5 tonnes to more than 9 tonnes.
Before the relief came into effect, owners of these vehicles needed to pay between $76 and $352 per 1000km.
Minister of Transport Michael Wood said transitioning away from reliance on fossil fuels was necessary to help shield households from the volatility of international price hikes while reducing transport and energy bills.
The Government was working towards this through its Clean Car Discount and Emissions Reduction Plan.
• Keep your car in top condition: Wash and wax your car, and remove unused roof racks to make it more aerodynamic. Get the right tyres, tyre pressure, wheel alignment and regular servicing.
• Don't speed
• Drive smoothly: Accelerate smoothly and slowly and stop gradually.
• Watch your air conditioning: Using air conditioning at higher speeds is more fuel efficient than having windows down, which creates excessive drag. However, having the air conditioning on constantly could cost an extra $200 a year.
• Keep your load weight down: Take any unnecessary items, such as golf clubs and sports gear, out of your car when you're not using them.
• Avoid short trips: Try and use alternative modes of transport, such as walking or cycling for short trips. Vehicles use more fuel when they're cold.
Source: AA Motoring
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