Petrol and diesel prices in NZ in the next few days will match the all time high they reached in 2008. But those who live in western Europe will still look enviously at the price in NZ. In the UK, for example, the current average price for Super is £1.38 ($NZ 3) per litre.
Why the difference? Basically, the level of taxes. About a third of the price at the pump in NZ goes to the Government; in the UK it is 63%.
There are benefits to higher prices, however, as it encourages people to use less. If people drive with a light touch on the gas pedal they will burn a lot less fuel than if they drive like a boy racer. Keeping to the speed limit will do that too: until recently on expressways it was common to see big trucks overtaking cars doing the legal limit; it is a little less usual now. Keeping tyres at the correct pressure, taking off that roof rack and removing unnecessary weight from the inside will also help.
Will higher prices lead to changes in lifestyle, such as making the kids walk or get the bus to school, and taking the train or bus to work? For those on middle incomes it will probably have an effect; the higher the petrol price goes, the more pronounced that will be. For those on high incomes it won't make any difference.
Will higher diesel prices make the railways more competitive for freight? In theory yes, but don't expect this government to allow that to happen.
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