New Zealanders who’ve recently returned from – or moved to – Australia often have a long list of things that have surprised them.

Maybe 30% cheaper groceries, according to one couple, cheaper homebrand Squigglesor higher wages.

But what about the petrol?

Petrol (91) was selling at inner-city Sydney stations for between A$2.17(NZ$2.28) and A$2.19 on Monday.

On the same day, central Auckland petrol was about $3.21.

Part of the difference is due to the tax component.

Brad Olsen, chief executive of Infometrics, looked at Australian Competition and Consumer Commission (ACCC) data, Ministry of Business, Innovation and Employment data and the average exchange rate in the June quarter.

He found that Australian fuel prices in New Zealand dollars were around $1.98 per litre in the quarter, and 63c per litre of that was tax.

In New Zealand, fuel prices were around $2.38 a litre for regular fuel, and about 87c of that was tax,

“Although that tax question is important, there’s a bit more to this than meets the eye,” he said.

“In NZ, fuel taxes go fully into the transport funding system, not into the wider tax take, and so money in from fuel taxes funds transport activity directly – GST and the ETS cost are additional, but the bulk of taxes are fuel excise.

“In Australia, it is recognised that fuel taxes are lower than other OECD countries, but also, the money just goes into the general tax pool, and so the link between fuel tax earnings and transport funding is a lot weaker.”

He said there was still difference once tax was taken out of the picture, which could be due to factors such as retail margins but also purchasing margins. “Australia is a country of 25 million, five times larger than NZ, so might well be able to get a better bulk purchasing deal when they buy from the international market.”

Terry Collins, AA spokesperson, said Australia was sourcing petrol on the same international commodity markets as New Zealand. “When you factor in the emissions trading scheme, ACC, increased fuel excise duty and GST it makes up the difference.”

Gaspy director Mike Newton said some Australian states required petrol stations to provide their fuel prices to the government, which boosted transparency.

But he said there was some relief in sight for motorists.

“Prices have been trending down a little bit. We peaked around the end of September, and it’s been pretty steadily downhill since then – $2.89 is currently the national average for 91, down from a peak of $3.03.”

He said diesel had not experienced a similar drop. “It’s much smaller – only about a 7c or 8c drop for diesel, it’s about half the size of the drop for 91.”

He said competition was showing through in prices.

“Looking at our graphs, there’s little downward spikes all over the place because Gull is basically running discount days every week at the moment, every Friday. The average price drops for a day and then goes back up again the next day. There are deals to be found out there if you can wait until a Friday. Even if Gull isn’t your brand the stations nearby compete.”

Extracted in full from:  https://www.stuff.co.nz/business/money/301007888/why-do-new-zealanders-pay-more-for-petrol-than-australians-do

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