Govt Fuel Tax Policies Anti-Competitive

Wednesday, 20 October 1999, 4:49 pm
Press Release: Unknown

New Zealand's automotive LPG should be excise-free, just like diesel, the LPG Association said today.

Association executive director, Peter Gilbert said there is no reason why automotive LPG should incur an excise tax at the pump when diesel doesn't.

"It's anti-competitive," he said. "And it sends the wrong signals to the market."

Mr Gilbert said LPG offers advantages that diesel doesn't.

"LPG is a low emission fuels so it's better for the environment. It is also locally produced so we don't have to import it - this saves us valuable overseas funds. Nor is it subject to the same price hikes as petrol and diesel.

"Yet LPG is taxed at the pump when diesel isn't. As a result, motorists obviously prefer diesel to LPG.

"Surely this kind of markedly tilted playing field is anathema to a Government that supposedly espouses free market, competition-driven policies.

"One thing is certain, it is very hard to compete in a market which Government has rigged against you."

Excise tax was removed from diesel in 1991 to assist the primary production and rural sector.

Now New Zealand has the cheapest diesel in the OECD.

ends

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