Mar 7, 2008 7:35 AM
BP New Zealand has warned that the government's current biofuel
obligation could result in a price increase on petrol and diesel of at
least seven cents per litre at the pump.
The petrol provider is predicting a 70 cent rise for unleaded 91 by late
2009.
It's blaming Labour's proposed biofuel blending bill for some of the
expected increase.
And the Reserve Bank claims the government's emissions trading scheme
will contribute an additional seven cents to the predicted rise.
"Best case scenario is more like $2.05 and that's with those impositions
and with the current oil price," says Mark Stockdale of the AA.
Adding to motoring misery are expected increases in ACC levies and
regional fuel taxes in both Wellington and Auckland.
Depending on what happens with international fuel prices and the
exchange rate one scenario has petrol at $2.40 at the pump. BP blames
some of the predicted increase on a proposed government bill forcing oil
companies to blend biofuels into petrol.
The expected price hike is made up of:
- The mandatory biofuel component
- The cost of the government's emission trading scheme
- ACC is raising its levy to cover road crashes
- Both Wellington and Auckland motorists could be forced to pay a
regional fuel tax.
All of that should start hitting motorists mid-year.
But according to one economist the price of oil will regulate itself.
"For $2.40, it's 70 cents more of what we are paying for now. That's so
much it seems like major scaremongering," says Robin Clements, UBS
Senior Economist.
But either way, petrol is costing more now than it ever has with New
Zealand prices at near record highs as ,oil hit an all-time high above
$104 a barrel in New York.
The Automobile Association says 91 octane reached $1.75 a litre in
Auckland, Wellington, Christchurch and Dunedin by the end of February.
AA motoring affairs general manager Mike Noon says New Zealand is just a
couple of cents away from our highest ever fuel prices.
He says the high New Zealand dollar helped stop petrol prices from sky
rocketing even further.
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Check for earlier Pacific Biofuel posts: http://pacbiofuel.blogspot.com/
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