The government is being urged to consider cutting taxes on petrol as the New Zealand dollar hits a 33-month low.
The kiwi has fallen to close to 64 US cents, the lowest since January 2016, and some forecasters say a drop of another 2 cents by the end of the year is likely.
Foreign exchange expert Derek Rankin of Rankin Treasury expects the dollar to keep falling until at least after Christmas, pushing up petrol prices even further.
But the government could alleviate the pressure on motorists given half the price of fuel at the pump is made up of taxes, he said.
"You can argue that we've got higher petrol prices because the oil price is up and the currency is down.
"That's true, but there's not a lot anyone can really do about that, ultimately.
"But we can do something about the taxes on the petrol."
Derek says the New Zealand economy would slow if petrol prices continued to go up.
"If you want the New Zealand economy to speed up, then just lower the petrol prices," he says.
Average prices for 91 octane hit $2.41 a litre last month and have been rising since then.
National Party leader Simon Bridges said the regional fuel tax would go under a National government.
The government was raking in "billions more" in taxes and though infrastructure was needed it could be paid for without new taxes.
"I just don't think they need to pile on new taxes at the moment if they make sure they're careful with the purse at this current time."
National would have no new excise taxes in a first term, he said.
Derek says the New Zealand dollar's fall was largely due to the strength of the US dollar, backed by an extremely strong US economy and low employment rates.
"Many currencies are falling against the US dollar."
A rise in US interest rates and a drop in its corporate tax are some of the other factors.
He estimates the New Zealand dollar will go as low as 62 US cents.
ANZ senior market strategist Phil Borkin says the dollar would remain weak over the next few months.
"At the moment the US dollar is king, and there's no way we want to stand in front of that train at the moment."
2 comments
fuel
Posted on 08-10-2018 14:06 | By dumbkof2
what will be the next excuse for putting the price of fuel up
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Posted on 08-10-2018 21:30 | By astex
Obviously, like him or not, Donald is doing something right. What we need to do is produce our own oil and gas instead of importing. OH! WAIT! we have put a stop to that idea as we stopped the exploration. Pity, as we could be an oil exporter and have cheap fuel from the royalties. The tax on fuel in Aussie is about 30% and their fuel costs around $1.60 pl and they are complaining about the cost. We pay around 60% tax and rising. Add to this the fact that we are one of the lowest paid nations in the OECD and the situation is even worse for us. Oh, as far as a boycott goes this will be ineffective as we all need fuel to get around but.... A boycott on any in store products would hit them harder.
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