Finance:2022 New Zealand fuel tax subsidy
In March 2022 the New Zealand government reduced a fuel tax after a cost of living crisis brought on by the COVID-19 pandemic and the Russian invasion of Ukraine. After multiple extensions to the subsidy's end date,[further explanation needed] it ended in June 2023.
Background
New Zealand was suffering from a cost of living crisis[when?] brought on by the COVID-19 pandemic, the Russian invasion of Ukraine, among other factors. In February 2022, fuel prices had risen by 13%.[1]
History
The cuts started in March 2022. Fuel prices would be reduced by 25 cents, and train and bus fares halved; there was also a 36% diesel discount.[2][1][3] Originally, these were planned to last only three months, ending in June. Prime Minister Jacinda Ardern at the time said that this would save between $11.50 and $17.25 per tank of fuel. In the May 2022 New Zealand budget, the subsidy was extended until January 2023.[1] In December 2022, the government extended the cuts until the end of February, then would halve the cuts to 12.5 cents per litre and end the subsidy on 31 March.[4] In February 2023, the government announced that it would extend the fuel cuts until the end of June.[4]
On 1 July 2023, the fuel tax cuts were removed.[5] People lined up at petrol stations before the tax cuts ended, and many people took multiple trips.[3] Some people urged motorists to refuel early to avoid queues or fuel shortages.[6] The end of the subsidy caused a large increase in the number of Gaspy users, a fuel price monitoring app.[7]
Cost
The cost to the government of the initial three-month period was $350 million. The extension until June 2023 cost $718 million. In total, it was estimated that $2 billion was spent on the subsidies.[further explanation needed][5]
References
- ↑ 1.0 1.1 1.2 "Fuel tax cuts: What you need to know" (in en-nz). 14 December 2022. https://www.rnz.co.nz/news/business/480760/fuel-tax-cuts-what-you-need-to-know.
- ↑ McConnell, Glenn (26 June 2023). "Boost for foodbanks as fuel tax cut, half-priced public transport, ends" (in en). https://www.stuff.co.nz/national/politics/132420667/boost-for-foodbanks-as-fuel-tax-cut-halfpriced-public-transport-ends.
- ↑ 3.0 3.1 "Petrol stations slammed as Govt fuel subsidy comes to an end" (in en). https://www.1news.co.nz/2023/06/30/petrol-stations-slammed-as-govt-fuel-subsidy-comes-to-an-end/.
- ↑ 4.0 4.1 "'It will come to an end': No more fuel tax subsidy after June" (in en-NZ). 29 October 2023. https://www.nzherald.co.nz/nz/grant-robertson-announces-fuel-tax-subsidy-will-end-in-june/HOBEB4W3QFHQPL7JUJYLGNMMMM/.
- ↑ 5.0 5.1 Mcilraith, Brianna (27 June 2023). "Explainer: Everything you need to know about the fuel tax cut ending" (in en). https://www.stuff.co.nz/business/132424317/explainer-everything-you-need-to-know-about-the-fuel-tax-cut-ending.
- ↑ "Motorists urged to fuel up early to avoid shortages" (in en). 25 June 2023. https://www.odt.co.nz/star-news/star-national/motorists-urged-fuel-early-avoid-shortages.
- ↑ Cann, Geraden (3 July 2023). "Surge in members of Gaspy app as New Zealanders seek out cheaper petrol" (in en). https://www.stuff.co.nz/business/132467674/surge-in-members-of-gaspy-app-as-new-zealanders-seek-out-cheaper-petrol.
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