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Aucklanders paying $140m per year extra in fuel prices - economist

Newshub logoNewshub 4 days ago Scott Palmer
Watch: The Commerce Commission has published its final report into the retail fuel market and has highlighted several ways New Zealanders are being forced to pay more than they should. © Image - Getty; Video - Newshub Watch: The Commerce Commission has published its final report into the retail fuel market and has highlighted several ways New Zealanders are being forced to pay more than they should.

Aucklanders are paying as much as $140 million a year more than they should be for their fuel, a leading economist claims.

Over the past year, fuel prices have dropped as international oil prices plummet. But in a new report, Shamubeel Eaqub says Auckland fuel prices have not fallen as much as the national average.

"Over the past year, fuel board prices have fallen by 29 cents across the country, but only 24 cents in Auckland and a huge 40 cents in Christchurch," Eaqub says.

"Unless there has been a marked change in the cost of delivering fuel and cost of doing business, it could indicate Aucklanders are paying 5-15 cents too much for their fuel (excluding the 11.5-cents regional fuel tax).

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"We estimate such a price difference would add $45m-$140m to Aucklanders' annual fuel bill across retail and business users."

The report points out that Christchurch and Dunedin have aggressive competition from independent retailers, which has led to higher falls in prices.

The report was commissioned by Nelson-based discount fuel company NBD, which is planning a major expansion into the North Island with a $100 million-plus investment in 32 sites over the next four years.

"North Island motorists are simply paying too much. We want to make people aware of the

significant discrepancy between North and South pump prices," CEO Barry Sheridan says.

"This clearly signifies a lack of genuine competition in the North Island fuel market."

Eaqub's report follows a 2019 Commerce Commission market study, which found New Zealand's fuel market is "not as competitive as it could be" due to "the lack of an active wholesale market".

That investigation was sparked by Prime Minister Jacinda Ardern who in 2018 said New Zealanders were being "fleeced" by fuel companies.

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