Retail Petrol Prices will not drop with a boycott!
By now you've probably recieved an email advising you to boycott one of the main Petrol Retailers. The theory is if you boycott one retailer, it will cut its prices to attract more business, forcing the others to match the lower price. Once all match the price you continue to boycott that retailer, and they have to cut the price again. Only, this is economic bollocks.
The reason is that all of the big four retailers get there petrol from the same wholesaler - Marsden Point Oil Refinery. And Marsden gets it's oil from the international market where the price of oil is set by a oil commodity market. So all have the same source of oil, the same refinery so the same wholesale price. If you are to move your custom from one retailer to another, the first retailer would have to reduce it's order from the refinery and the other would have to increase it's order. But the wholesale price would stay the same.
The retail price in New Zealand is at it's lowest possible point. How? Because is any retailer sold petrol cheaper than the others it would get increased custom. But it could not sell at a loss (for an extended period) without going bust. So, over time, petrol prices have reached an equilibrium where the price is the minimum you can sell and still provide an acceptable economic return.
However, if you are interested in reducing the price of petrol, don't boycott the oil retailers. Boycott the Government. Here's why:
Presently, about 70 cents of every litre of petrol you buy goes to the Government in taxes, ACC levies and excise duties. About two-thirds is used for roading related costs - the ACC Levies pay for accident costs, excise duties pay for roading. But the rest goes into the 'Consolidated Fund' along with all income tax, GST, Company Tax - all Government Charges.
The 'Consolidated Fund' pays for all Government services - Health, Education, Social Welfare, Parliament, Ministerial Services, NZ on Air, etc. And the Government is on track to make a surplus in the region of $8 Billion Dollars this year. That is four times the combined profits of all the foreign-owned Banks.
And since 2000, they've whacked on almost 20 cents per litre in additional taxes - remember in 2000 the Goverment Surplus was about half what it is now.
Despite this massive profit, er, surplus - the Government enacted legislation that means every year the amount of tax on petrol is increased in line with inflation. So next year, petrol will go up another 3c or 4c per litre. And now they're talking about additional charges to pay for regional roading projects like State Highway 20 in Auckland and Transmission Gully in Wellington.
If you want to join in this boycott write to your local Labour MP or United Future MP and tell them that they should reduce the taxes on Petrol, or you will cast your Party Vote for National, ACT or NZ First (you pick) unless they act. Then the price will come down. Send it (no stamp required) to:
Parliament Buildings
Wellington.
The reason is that all of the big four retailers get there petrol from the same wholesaler - Marsden Point Oil Refinery. And Marsden gets it's oil from the international market where the price of oil is set by a oil commodity market. So all have the same source of oil, the same refinery so the same wholesale price. If you are to move your custom from one retailer to another, the first retailer would have to reduce it's order from the refinery and the other would have to increase it's order. But the wholesale price would stay the same.
The retail price in New Zealand is at it's lowest possible point. How? Because is any retailer sold petrol cheaper than the others it would get increased custom. But it could not sell at a loss (for an extended period) without going bust. So, over time, petrol prices have reached an equilibrium where the price is the minimum you can sell and still provide an acceptable economic return.
However, if you are interested in reducing the price of petrol, don't boycott the oil retailers. Boycott the Government. Here's why:
Presently, about 70 cents of every litre of petrol you buy goes to the Government in taxes, ACC levies and excise duties. About two-thirds is used for roading related costs - the ACC Levies pay for accident costs, excise duties pay for roading. But the rest goes into the 'Consolidated Fund' along with all income tax, GST, Company Tax - all Government Charges.
The 'Consolidated Fund' pays for all Government services - Health, Education, Social Welfare, Parliament, Ministerial Services, NZ on Air, etc. And the Government is on track to make a surplus in the region of $8 Billion Dollars this year. That is four times the combined profits of all the foreign-owned Banks.
And since 2000, they've whacked on almost 20 cents per litre in additional taxes - remember in 2000 the Goverment Surplus was about half what it is now.
Despite this massive profit, er, surplus - the Government enacted legislation that means every year the amount of tax on petrol is increased in line with inflation. So next year, petrol will go up another 3c or 4c per litre. And now they're talking about additional charges to pay for regional roading projects like State Highway 20 in Auckland and Transmission Gully in Wellington.
If you want to join in this boycott write to your local Labour MP or United Future MP and tell them that they should reduce the taxes on Petrol, or you will cast your Party Vote for National, ACT or NZ First (you pick) unless they act. Then the price will come down. Send it (no stamp required) to:
Parliament Buildings
Wellington.
posted by Michael at
7:15 PM
1 Comments:
You're right. The oil companies make next to no money from the sale of petrol. It's the drinks and snacks inside the store that does it for them. That's a further reason why they don't come out and fill up your car anymore - if they force you to come inside, you might buy some crap.
By
Rich, at 2:08 PM
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