In New Zealand on Wednesday morning, the Gaspy website showed the price of diesel was $3.51 on average \u2013 more expensive than the price of unleaded 91 priced at $3.43.<\/p>\n
David Hill, general manager of Hawke\u2019s Bay\u2019s Emmerson Transport, said its fuel bill had gone up 110% and the company had no choice but to pass that on to its customers.<\/p>\n
\u201cIn the 35 years I\u2019ve been involved in the road transport industry, we\u2019ve never seen increases of this magnitude,\u201d he said.<\/p>\n
\u201cMost operators obviously are having issues with funding that.\u201d<\/p>\n
Hill said prudent operators would take into account the \u201cfuel adjustment factor\u201d (Faf) and set their rates at the end of the month for the following month.<\/p>\n
However, he said some operators were on fixed price arrangements \u2013 such as quarterly pricing \u2013 and would not be able to adjust their prices.<\/p>\n
Hill said his company had taken a hardline approach to Faf, and its customers had been understanding.<\/p>\n
\u201cMost responsible corporates these days accept what the situation is and work with their providers,\u201d he said, and the company would not do anybody any favours, \u201cthe stakeholders or our staff\u201d, if it goes out of business over not having recovered the Faf.<\/p>\n
Hill said the current situation was comparable to the diesel spike during the Global Financial Crisis \u2013 but even then, the New Zealand currency had a stronger exchange rate to the US dollar than now.<\/p>\n
Tour bus operator forced to implement fuel surcharge<\/p>\n
Meanwhile, a tour bus operator has had to implement a fuel surcharge to accommodate the growing diesel prices.<\/p>\n
Ready 2 Roll offers tours and airport transfers in the central North Island.<\/p>\n
Director Carleen Dahya told Morning Report it had seen nearly a $100 increase at the pump in just over a week.<\/p>\n
\u201cAlready a vehicle that was costing us $140 to fill up a week-and-a-half ago is now $250.\u201d<\/p>\n
Dahya said the company was currently charging a 12% surcharge, but the effects would take time to flow through.<\/p>\n
The surge is driven by disruptions in the Strait of Hormuz, a key route for about one-fifth of global oil and gas. Photo \/ 123rf<\/p>\n
\u201cWe\u2019re not going to start to recover that until sort of a month\u2019s time, because we\u2019ve honoured bookings that we\u2019ve already got because it\u2019s not their fault \u2013 it\u2019s not our fault, but we\u2019re the ones who have to wear it.\u201d<\/p>\n
She said even with adding the 12% on, with the cost of diesel, the numbers were tight.<\/p>\n
\u201cIt\u2019s going to be an interesting process moving forward, how many times we have to increase our surcharge to keep up with the fuel increases.\u201d<\/p>\n
Dahya said the current situation was a nightmare.<\/p>\n
\u201cWith the diesel prices as well as road user [charges], it\u2019s going to kill us.\u201d<\/p>\n
She said the company was also seeing a trend of people cancelling because of disruption the fuel crisis was having on their travel plans.<\/p>\n
Finance Minister says tax relief won\u2019t work<\/p>\n
Finance Minister Nicola Willis has rejected any tax relief for the transport industry, saying it would not work.<\/p>\n
She acknowledged the diesel price was very high, because diesel was one of the fuels that had been most disrupted by the crisis in the Middle East.<\/p>\n
\u201cIts cost to get into New Zealand has gone up considerably and that\u2019s where you\u2019ve seen the biggest price rises,\u201d Willis said.<\/p>\n
Finance Minister Nicola Willis. Photo \/ Mark Mitchell<\/p>\n
Diesel users pay their road tax through the road user charge, whereas petrol users just pay it at the pump, as the tax is added to the price of their fuel, she said.<\/p>\n
\u201cThe challenge we face is that if we were to take away that tax, that would put a half-billion-dollar hole in our road funding, which would only multiply every time you extended that reduction … and then we would simply not have enough funding available to maintain our roads.\u201d<\/p>\n
Willis said officials have also been clear that there may come a time when road users would be asked to conserve fuel.<\/p>\n
\u201cOur officials have been very clear that sending a price signal that you\u2019re taking away a tax at the same time as you\u2019re asking for restraint doesn\u2019t make sense, it\u2019s very contradictory.\u201d<\/p>\n