Fuel companies respond to boycott calls

File photo.

Fuel companies around the country say that the rise in fuel costs are out of their control.

Their response follows the announcement of a nationwide fuel strike, which is set to be held throughout the country on October 26.

Thousands of people have pledged their support to boycott all fuel stations on the day, with more than 7000 people having confirmed their participation on the protest’s Facebook event page, and a further 10,000 indicating their interest.

The strike has also resulted in a call from some protesters to target specific fuel companies, with another protest singling out all Z fuel stations, planned for October 7.

SunLive contacted a handful of New Zealand fuel companies to hear their reaction to the strike announcement; many of who say it is beyond their control.

Gull general manager Dave Bodger says he feels for customers.

“People are concerned about fuel pricing, there’s no two bones about that.

“You’ve got taxes going on along with regional fuel taxes; the price is going up, the dollar is going down and that hits motorists in the wallet big-time.

“This is why for the last 20 years our business has been based on giving the best value we can.”

He says the protest is not surprising.

“The unfortunate thing is that in the end, fuel is almost a necessity to participate in modern society.

“You need it to go to work, to take the children to sport and therefore if the price goes up you end up not going to the movies, or you buy sausages instead of steak, and if you’re already buying sausages well then it gets real tough; this is the unfortunate reality of it.

“I understand why people are looking for some kind of action.”

He says the company does its best to keep fuel prices as low as possible.

“From our point of view we’ve got a well-documented record of having some of the best fuel prices.

“We basically have one fuel terminal in Tauranga, where as our competitors collectively have eleven or twelve. We think that gives us some economy because we get our storage right at fuel stations.

“We get good trucking efficiency. We operate many unmanned fuel stations, and the lower rental and wage costs enables to pass that saving on to motorists.

“It’s also the attitude, we offer a good price and people will support us; it’s something people in the Bay of Plenty know well.”

He says while outrage surrounding fuel pricing has always been felt by some customers, there are also new factors contributing to these attitudes.

“The attitude has been around on-and-off for the last few years, it generally has been targeted at one specific brand which we have never thought was fair. But now on top of that we also have an excise increase.

“You’ve really got to look at what makes up the fuel price to understand: seventy cents goes to excise costs; emissions trading cost sits at around five to six cents; there are other levies and charges which sit at about a cent per litre; GST; and for people living in areas like Auckland you also have another 10 cents per litre going towards regional tax costs which is likely to hit other regions in coming years.

“Put all that together and you’re well over $1 a litre. So if you’re paying about $2 per litre, basically, half of what you are paying is going to the Government.

“You can strike all you like but actually it’s the Government who are the ones that are taking half the value.”

This, however, is also a complicated situation, he says.

“For lack of a better term its hypothecation; all of that excise goes back into producing infrastructure for us to drive our trucks and cars on.

“I believe the Government in the fact that money is then spent on roading. However, that being said, it always comes back to the fact that for customers; it used to cost a certain amount to fill your tank, and now it costs more.

“This means getting further into debt to keep your lifestyle where it’s at.”

Z Energy external communications manager Sheena Thomas says from their side of things, it’s a matter of high cost and low margin.

“We absolutely respect people’s right to protest, it’s fundamental to a democratic society and we absolutely respect their right; so long as they are safe about it and they aren’t disruptive to customers.

“Z don’t drill for oil, we don’t produce it and we don’t explore for it, so everything we sell in New Zealand is bought from an international market.

“Barrel prices are really high at the moment, along with the exchange rate. Some people have commented on the fact the barrel price was higher in 2014, yet the pump prices are higher now.

“The reason for this is the exchange rate is a lot weaker, in New Zealand dollar terms it’s about equivalent, and also there are a lot more taxes added on to the overall cost since this time.

“We feel customers pain, we fill our cars too and prices are really high; but it’s because international prices are high, it’s not us unjustifiably putting the prices up.

“It’s a high cost, low margin business – the terminal is expensive, the transport is expensive and there’s not much margin there to play around with.”

They key is waiting for this to reverse, says Sheena

“Once the barrel rates come down and the exchange rate strengthens we can lower the price.

“Another thing customers can do is take advantage of discount schemes including fuel discount vouchers, Fly Buys and AA Smart Fuel cards, and also shopping around.

“There’s all sorts of things that come into this that are problematic, the cost of the fuel and the taxes; but at the end of the day the main thing is if the public feels strongly about something it’s important they are heard and feel heard.”

Her comments are in line with those made by BP communications and external affairs manager Leigh Taylor.

“BP is mindful of the impact of fuel prices on our customers and we review our BP Connect prices daily to ensure they’re as competitive as possible.

“There are a number of factors that influence the price of fuel, some of which are not within our control, including cost of product, the exchange rate, and taxes and levies. 

“Recent price changes have been influenced by changes to the cost of product and the weakening NZ dollar, both of which factors out of our control.

“In addition to this, the government recently increased the national fuel excise by 3.5 cents per litre, plus GST, which has also impacted the price of fuel for motorists across the country.” 

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