Rural sector calls for fuel price relief

Higher prices at the petrol pump will ultimately lead to increased food prices, says Rural Contractors chief executive Andrew Olsen. Photo / RNZ - Dan Cook

By Sally Murphy of RNZ

Rural industries struggling with rising fuel costs are calling on the government to reduce fuel taxes to make it more affordable.

Russia's invasion of Ukraine has pushed the oil price up to US$109 (NZ$159) a barrel - resulting in the price at the pump tipping over $3 a litre here.

Rural Contractors chief executive Andrew Olsen said contractors would have to pass the increased costs on to farmers, which would lead to increased food prices.

"When the product lands in a supermarket at a much higher cost it's probably going to raise eyebrows," he said.

"We've got the government looking at how much money the supermarkets are making, which is fine, but they need to take a step back and look at what levers and pulleys can be used to control the increase of fuel here and now at the pump."

Olsen said the government should reduce the tax charged on fuel while prices were so high.

"This isn't the right time to be raising revenue when we are trying to keep the country going."

Where are fuel prices heading?? #fuelprices #gasprices @Lewisridge_Farm @rmcintyre007 @PaulBMcGill @grant_farquhar pic.twitter.com/BUqARfoJ1G

— YOLOFarmerNZ (@yolofarmernz) March 10, 2022

Federated Farmers energy spokesperson Wayne Langford said the rising fuel price was the hottest topic amongst farmers at the moment.

"What goes up must come down and while commodity prices for things like beef and milk are high, eventually they will come down."

However, he said fuel would likely remain expensive, meaning farmers would experience lower income and higher expenses in the longer term.

Langford said farmers he had spoken to were already making moves to reduce their fuel use.

"We're already seeing it on-farm, when jobs don't have to be done they're not getting done; people are taking less trips to town.

"I've already spoken to my kids, they're getting the school bus more often than not, so I think it's having an effect on everyone. And if it keeps going up like it is it'll really start to bite."

Langford said the rising fuel price had the ability to isolate rural communities even more, but he was not sure reducing taxes was the best idea.

"It's an interesting point but we've seen significant under-investment in roading under successive governments so while I'd love to take some tax off, I would only see that as a short-term fix."

Finance Minister Grant Robertson has not ruled out changes to fuel taxes to help alleviate rising costs at the pump.

- RNZ