Monday, May 05, 2008

Petrol Porkies

As petrol at NZ pumps head towards two dollars per litre, commerce minister Lianne Dalziel says his morning there's nothing her government can do to lower prices.

Au contraire, Lianne.  Since the government is taking a fairly savage proportion* of the cost of every litre in tax (which is far more than the profits the oil companies make on every litre of their own oil every litre, and with GST on top) I'd say there's something very tangible the government can do, don't you?  

And this is not to mention the extra twenty-five cents per litre (plus GST) that the government is about to levy to pay for feelgood anti-global warming measures, and for its latest bout of constructing public transport infrastructure that few people want to use.

So frankly, Lianne, there's something very simple your government could do to lower petrol prices: Stop stealing.

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* Last I checked this was something of the order of forty-seven percent, and that was before the extra five cents per litre 'green' tax added on April Fool's Day this year.  Perhaps someone with a calculator and access to an accurate account of the theft could let me know this morning what it amounts to now?

UPDATE:   Thanks to commenters JC and 'Spam,' who've come up with these figures:

    Going back to early 2007, taxes were $0.50 excl GST.
    GST is charged on the total price of fuel, and with a total price at around $2 / litre, the GST component is about $0.22. Now, with the importer margin being only around $0.18 the government is making more money out of GST ONLY than the oil companies are making on a per-litre basis!
   
[On top of that there's] the ACC levy of 7 cents, soon to be 9 cents on each litre. 
    So you have a 50 cent levy, a 9 cent ACC levy plus 22 cents GST... in round figures [that's about] 80 cents per litre to the government.
To put that in perspective, the government's take is about what we used to pay for petrol around 1997/98.

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6 Comments:

Blogger Bryan Spondre said...

ARC transport subsidies in 06/07 around $134 million dollars : http://www.arc.govt.nz/plans/annual-plans-and-report/annual-report-200607.cfm

Do we really want to take more money from the road user to electrify trains no one uses ?

5/05/2008 09:50:00 am  
Anonymous Elijah Lineberry said...

I have always believed Don Brash, during the 2005 election campaign refusing to cut petrol taxes to keep the price under $1 per litre..(gosh, those were the days!)... cost him the last election.

But yes, the Minister is being a bit silly.

There is also the slight matter of the Government allowing oil exploration on a much larger scale in New Zealand, and cutting the time it takes to get a permit...(it is all about supply, folks!)

5/05/2008 11:21:00 am  
Anonymous spam said...

http://www.med.govt.nz/templates/ContentTopicSummary____20094.aspx#g2

And:http://www.aa.co.nz/about/issues/fuel-taxes-fines-charges/Pages/PetrolTax.aspx

Going back to early 2007, taxes were $0.50 excl GST.

GST is charged on the total price of fuel, and with a total price at around $2 / litre, the GST component is about $0.22. Now, with the importer margin being only around $0.18 the government is making more money out of GST ONLY than the oil companies are making on a per-litre basis!

5/05/2008 01:00:00 pm  
Anonymous JC said...

"Now, with the importer margin being only around $0.18 the government is making more money out of GST ONLY than the oil companies are making on a per-litre basis!"

You missed the ACC levy of 7 cents.. soon to be 9 cents on each litre.

So you have a 50 cent levy, a 9 cent ACC levy plus 22 cents GST.. round figures of 80 cents per litre to the Govt. To put that in perspective, the Govt's take is about what we used to pay for petrol around 1997/98.

JC

5/05/2008 03:19:00 pm  
Anonymous LGM said...

So let's see. The oil companies get to pay for the entire infrastructure to locate, bring in, refine, transport and retail the oil products. The installed infrastructure they have invested billions of dollars into is huge. They get some profit out of this and people whinge and belly ache about how evil they are for so doing.

Meanwhile, down in Wellington, the government, takes the majority of the revenue from the oil provided by said oil companies and consumes it. Do consumers complain about those people? No. Only about the oil companies.

Funny that.

LGM

5/05/2008 04:30:00 pm  
Blogger Gman said...

Hey peter, check out this fine article from thomas sowell on oil and the spin of oil.

http://www.realclearpolitics.com/articles/2008/05/too_complex.html

as per usual, his writing is so concise and profound, and the moral sentiment is amazing.

Gman

5/13/2008 10:11:00 pm  

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