Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Govt should absorb inflationary oil security cost

15 December 2004

Government should absorb inflationary oil security costs

The Automobile Association says it is a Government’s responsibility to meet any costs associated with increasing the nation’s oil supply cushion from 60 days to 90 days rather than passing it on very conveniently at the pump to petrol and diesel users.

“If the cost of extra oil and storage construction is added to the pump price to achieve an extra 30 days of oil stocks, there will inevitably be inflationary pressures throughout the entire economy. The faster the new stockpile is added the bigger that pressure will be. With inflation currently running at 2.5% additional inflationary pressures will clearly result in an increase in the official cash rate, so that households will face the twin effects of both higher transport costs for themselves and the goods they buy, but also higher housing costs,” Mr Fairbairn said.

Mr Fairbairn questioned the need for the haste in determining to increase storage.

“The report states that the socially optimal level of storage to cover for possible risks is in fact lower than the level the Government is pushing for. New Zealand is in the unusual situation of being up to 30 days by ship from the Middle East and typically has that extra socially optimal level of storage on ships heading here at any moment in time. Why is the Government not requesting the International Energy Agency (IEA) to take this into account?” he asked.

Mr Fairbairn said that if the Government wanted to treat the cost of the difference between socially optimal levels of storage and the IEA’s requirement as the cost of IEA membership, then the Government should pay for that added cost, recognising that the end beneficiary is the nation.

“The Government continues to divert over $600 million a year of petrol taxes into its coffers. There is no good reason why motorists alone should meet this proposed added cost at the petrol pump.

ENDS


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>

ALSO:

Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>

ALSO:

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news