 | This article may be confusing or unclear to readers.(January 2024) |
In March 2022 the New Zealand government reduced a fuel tax after a cost of living crisis brought on by the COVID-19 pandemic and the Russian invasion of Ukraine. After multiple extensions to the subsidy's end date,[ further explanation needed ] it ended in June 2023.
New Zealand was suffering from a cost of living crisis[ when? ] brought on by the COVID-19 pandemic, the Russian invasion of Ukraine, among other factors. In February 2022, fuel prices had risen by 13%. [1]
The cuts started in March 2022. Fuel prices would be reduced by 25 cents, and train and bus fares halved; there was also a 36% diesel discount. [2] [1] [3] Originally, these were planned to last only three months, ending in June. Prime Minister Jacinda Ardern at the time said that this would save between $11.50 and $17.25 per tank of fuel. In the May 2022 New Zealand budget, the subsidy was extended until January 2023. [1] In December 2022, the government extended the cuts until the end of February, then would halve the cuts to 12.5 cents per litre and end the subsidy on 31 March. [4] In February 2023, the government announced that it would extend the fuel cuts until the end of June. [4]
On 1 July 2023, the fuel tax cuts were removed. [5] People lined up at petrol stations before the tax cuts ended, and many people took multiple trips. [3] Some people urged motorists to refuel early to avoid queues or fuel shortages. [6] The end of the subsidy caused a large increase in the number of Gaspy users, a fuel price monitoring app. [7]
The cost to the government of the initial three-month period was $350 million. The extension until June 2023 cost $718 million. In total, it was estimated that $2 billion was spent on the subsidies.[ further explanation needed ] [5]
The economy of New Zealand is a highly developed free-market economy. It is the 52nd-largest national economy in the world when measured by nominal gross domestic product (GDP) and the 62nd-largest in the world when measured by purchasing power parity (PPP). New Zealand has a large GDP for its population of 5 million, and sources of revenue are spread throughout the large island nation. The country has one of the most globalised economies and depends greatly on international trade, mainly with Australia, China, the European Union, Japan, Singapore, South Korea, and the United States. New Zealand's 1983 Closer Economic Relations agreement with Australia means that the economy aligns closely with that of Australia.
A filling station is a facility that sells fuel and engine lubricants for motor vehicles. The most common fuels sold in the 2010s were gasoline and diesel fuel.
A subsidy or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having access to essential goods and services while giving businesses the opportunity to stay afloat and/or competitive. Subsidies not only promote long term economic stability but also help governments to respond to economic shocks during a recession or in response to unforeseen shocks, such as the COVID-19 pandemic.
A fuel tax is an excise tax imposed on the sale of fuel. In most countries the fuel tax is imposed on fuels which are intended for transportation. Fuel tax receipts are often dedicated or hypothecated to transportation projects, in which case the fuel tax can be considered a user fee. In other countries, the fuel tax is a source of general revenue. Sometimes, a fuel tax is used as an ecotax, to promote ecological sustainability. Fuel taxes are often considered by government agencies such as the Internal Revenue Service as regressive taxes.
The fuel protests in the United Kingdom were a series of campaigns held in response to the rising petrol and diesel fuel prices for road vehicle use. There have been three notable campaigns amongst many other protests in the 21st century. The first major protest in 2000 was primarily led by independent lorry owner-operators. One group of lorry owner-operators from the South East of England formed a protest group called "TransAction" that protested at oil refineries and fuel depots in Essex. Protests and blockades of oil facilities caused widespread disruption to the supply of petroleum products. The aim of the protests was to secure a reduction in the fuel duty rate on petrol and diesel, which the government refused to enact. After the protest ended, the government did announce a freeze on fuel duties, and promised changes would be made to the way that goods vehicles were taxed, which would include the taxing of foreign vehicles operating on British roads.
Carless days was a petrol demand reduction scheme active in New Zealand from July 1979 to May 1980. Introduced by the Third National Government of New Zealand, during the 1979 oil crisis, the scheme prohibited owners of private petrol-powered vehicles to drive on a self-designated day of the week. The enabling regulations were one of several attempts to help the New Zealand economy after the oil shocks of the late 1970s—other such policies included the Think Big strategy.
Autogas or LPG is liquefied petroleum gas (LPG) used as a fuel in internal combustion engines in vehicles as well as in stationary applications such as generators. It is a mixture of propane and butane.
Hydrocarbon Oil Duty is a fuel tax levied on some fuels used by most road motor vehicles in the United Kingdom; with exceptions for local bus services, some farm and construction vehicles and aviation, which pay reduced or no fuel duty.
Motoring taxation in the United Kingdom consists primarily of vehicle excise duty, which is levied on vehicles registered in the UK, and hydrocarbon oil duty, which is levied on the fuel used by motor vehicles. VED and fuel tax raised approximately £32 billion in 2009, a further £4 billion was raised from the value added tax on fuel purchases. Motoring-related taxes for fiscal year 2011/12, including fuel duties and VED, are estimated to amount to more than £38 billion, representing almost 7% of total UK taxation.
The usage and pricing of gasoline results from factors such as crude oil prices, processing and distribution costs, local demand, the strength of local currencies, local taxation, and the availability of local sources of gasoline (supply). Since fuels are traded worldwide, the trade prices are similar. The price paid by consumers largely reflects national pricing policy. Most countries impose taxes on gasoline (petrol), which causes air pollution and climate change; whereas a few, such as Venezuela, subsidize the cost. Some country's taxes do not cover all the negative externalities, that is they do not make the polluter pay the full cost. Western countries have among the highest usage rates per person. The largest consumer is the United States.
The 2007 gasoline rationing plan in Iran was launched by president Mahmoud Ahmadinejad's cabinet to reduce that country's fuel consumption. Although Iran is one of the world's largest producers of petroleum, rapid increases in demand and limited refining capacity have forced the country to import about 40% of its gasoline, at an annual cost of up to USD $7 billion.
Marsden Point Oil Refinery was a 96,000 BPD refinery located at Marsden Point, Whangarei, Northland, New Zealand. It was the only oil refinery in New Zealand, and is operated by Refining NZ. The point was named after Samuel Marsden. The regional survey map shows it was called Marsden Point in 1907.
The main fuel tax in Australia is an excise tax, to which Goods and Services Tax ("GST") is added. Both taxes are levied by the federal government. In Australia the GST is applied on top of the fuel excise tax. In some cases, businesses may be entitled to exemptions or rebates for fuel excise tax, including tax credits and certain excise-free fuel sources.
The economy of Iran includes a lot of subsidies. Food items, such as flour and cooking oil, are subsidized, along with fuels such as gasoline. However cutting subsidies can cause civil unrest.
Subsidy reform in Malaysia was initiated in July 2010 by Prime Minister Najib Razak via a reduction in subsidies for fuel and sugar. Further cuts in subsidies for these and other products are planned over a three- to five-year period to strengthen government finances and improve economic efficiency.
In March 2012 Unite trades union warned it was considering a strike over health and safety standards. Unite represents around 2,000 tanker drivers, who deliver fuel to 90% of Britain's forecourts. Although no strike took place, Government action precipitated panic-buying and a woman was seriously injured after following a minister's advice to store extra petrol.
Fossil fuel subsidies are energy subsidies on fossil fuels. They may be tax breaks on consumption, such as a lower sales tax on natural gas for residential heating; or subsidies on production, such as tax breaks on exploration for oil. Or they may be free or cheap negative externalities; such as air pollution or climate change due to burning gasoline, diesel and jet fuel. Some fossil fuel subsidies are via electricity generation, such as subsidies for coal-fired power stations.
The Sixth Labour Government governed New Zealand from 26 October 2017 to 27 November 2023. It was headed first by Jacinda Ardern and later by Chris Hipkins, as Labour Party leader and prime minister.
Since late 2021, the prices for many essential goods in the United Kingdom began increasing faster than household incomes, resulting in a fall in real incomes. This is caused in part by a rise in inflation in both the UK and the world in general, as well as the economic impact of issues such as the COVID-19 pandemic, Russia's invasion of Ukraine, and Brexit. While all in the UK are affected by rising prices, it most substantially affects low-income persons. The British government has responded in various ways such as grants, tax rebates, and subsidies to electricity and gas suppliers.
Gaspy is a crowd-sourced petrol price monitoring application for New Zealand. It based in Tauranga and available for both iPhone and Android. Prices are entered into the app by motorists. As of March 2020 the app has half a million users. A founder of Gaspy says that 97 percent of the app's data is accurate, and that the data is externally audited.