Petrol Prices

Petrol prices are up a bit this week but still below $2 a litre. Not so long ago, we were paying a lot more than $2. Why?

There are many factors. Probably the main one is the price we pay to buy oil from overseas. Although we produce a little oil ourselves – Taranaki has oil and gas fields – we have to import most of what we need. At the moment, the price is low and the Kiwi dollar is quite high.

There are other costs involved. We also pay to refine the petrol. There is an oil refinery in Northland. After the oil is refined, it is sent through pipes to the whole of NZ.

The fuel company adds about 20% to cover their costs of operating a petrol station: the building, staff, transporting the petrol. If you live in the North Island, you might find cheaper petrol as there is more competition between petrol companies.

However, about $1 of the cost per litre is transport tax and money that goes to ACC for accidents on the road. The transport tax is used for roads, cycleways and a contribution towards public transport. It also includes payment for carbon emissions under the emissions trading scheme. Vehicles which use diesel, pay road user charges for every kilometre they travel. Trucks are the main vehicles using diesel and they pay thousands in transport tax.

Finally, we pay 15% GST.

People in Europe pay much higher tax on petrol which is one reason small cars are popular in Europe. In fact, our petrol is quite cheap in comparison to what people in many other countries pay.


• Taranaki – a province on the West Coast of the North Island
• refine (v), refinery (n) – make something pure; place where oil is made pure
• emissions – putting carbon in the air when petrol is used
• emissions trading scheme – an agreement between countries to pay for producing carbon e.g. by buying trees
• vehicle – car, truck, motorbike etc
• GST – Goods and Services tax.


How much is petrol in your country?

One Comments

  1. You said ; In fact, our petrol is quite cheap in comparison to what people in many other countries pay.
    No way !!! Look at this!

    It was 20 years ago when NZ was less expensive than other countries.

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