Oily Rag - Monitoring Motoring Costs

 Read more Oily Rag articles by Frank and Muriel Newman 

The cost of getting from A to B is on the rise, again. The pump price of fuel rose a staggering 7 cents a litre on 1 October as the GST increase bit and the government added another 3 cents a litre in tax.

We often hear grumbles about petrol stations, but hidden deep within that pump price is another story. According the Ministry of Economic Development, on 1 October 2009, 56 cents out of over litre went on taxes. Since then petrol companies have had to pay the government’s global warming tax which added about 4 cents a litre, and then there’s the latest 7 cent a litre increase.

In reality, it’s fair to say that the biggest “winner” from fuel sales is the taxman (and taxwoman). About 40 percent of the cost of filling a vehicle is going into taxes of some kind. In other words, if you put $20 worth of fuel in your tank, $8 goes to the government. Probably about $10 represents the actual cost of the fuel itself. That’s the cost of the crude, refining it, and transporting it to the retailer. The retailer receives the other $2 more or less from which they pay their costs (rent, wages, holiday pay, Kiwisaver contributions, power, repairs, etc) and a residual as a return on the money they have invested, and a reward for their effort and risk.

So what sorts of things will affect price rises in the future? The main factors are the price of crude oil, which is paid for in US dollars, the US-Kiwi dollar exchange rate, and government taxes.

So now we know why petrol is so jolly expensive, here are some ways to consume less. The government’s Energywise website has some useful tips:

• Walk or cycle instead and combine several small trips into one journey. Avoid short trips. A car uses 20% more fuel when the engine is cold.

• Consider car pooling. Two people in one car is twice as efficient as two cars with one person each.

• You could save about 20% of your fuel by driving more efficiently. The basic rule is don’t drive like you’re racing in Bathhurst! Drive smoothly and keep a constant speed – like your granddad! Reducing your speed by 10 km/hr can knock around 10% off your fuel consumption.

• Keeping your tyres at the right pressure saves fuel.

• Turn the air conditioning off. In older cars, running it uses around 10% more fuel.

• Don’t carry excess weight. Take the golf clubs out of the boot! Remove the roofracks to reduce drag.

• If you are going to be stationary for more than 30 seconds, switch off your engine.

• Buy a car that suits your needs. A V12 E-type jag may be James Bond’s car of choice, but is not likely to suit those with more modest lifestyles!

print