The fuel price mayhem looks set to continue with the Automobile Association saying drivers should be prepared for the cost of petrol at the pump to continue to increase.
The price of fuel has skyrocketed in 2022. In the first week of this year, 91 was sitting at an average of $2.61 a litre. Now some stations in Auckland are charging as much as $3.41 a litre - that's an 80 cent jump in just 10 weeks.
AA policy advisor Terry Collins said the Russian-Ukraine conflict and the excise duty and taxes Kiwis pay on fuel - which makes up 45 percent of the cost - will contribute to prices at the pump continuing to rise.
"It has been highly volatile over a weeks period, the price of crude oil internationally went up 20 percent, it has come back four or five percent but we have to look this week and see where the prices settle at," Collins told AM on Monday.
"There is so much doubt and uncertainty around what is happening with the sanctions with the Russia-Ukraine conflict, that is the real game-changer, that's the real disrupter to the market right now."
Collins believes the emissions trading scheme is the one tax that will continue to increase and hit Kiwis hard at the pump.
"Look it's all under review, this year the Minister decided not to put up the ACC levy even though there was a good business case for it. Next year they will review the fuel excise duty tax, which is what we build our roads with but the one I am certain that will continue to go up is the emissions trading scheme," he said.
"Currently, it contributes 18-20 cents to the price of fuel and that is at a carbon price of $70-$80. The Government thinks that cap price in the future should be $250, so obviously when it gets to that level, there is a much larger contribution for more carbon emissions for the cost of petrol.
"Something like this could add another $0.40, so at the current levels, you would be looking at something like $1.75 on taxes, the regional fuel tax add another 10 or 11 cents, you got $1.85, pretty soon you're getting close to $2 and you haven't even bought the product yet."
Collins isn't sure when that increase will happen, but when it does, it will match the increased rate of inflation, which is also growing rapidly.
"The productivity commission believes the price of carbon should go up by the rate of inflation annually plus 10 percent, economists are picking inflation rate to be in the quarter of about seven percent, add another 10 percent to that it's a 17 percent increase."
The cost of living is increasing with Kiwis spending on average an extra $4000 to $5000 in the past 12 months on basics such as food, rent and fuel. The majority of the increase is fuel with an extra $678 a year at the pump on average.
