Fuel taxes!

**Edbear** · 5th May 2011, 14:13

This is the gist of an email I've sent to the Ministry of Transport, I wonder what response I'll get.

It's a hot topic right now, Autocar is getting on the Bandwagon about it among others. Any thoughts?

"I am looking at buying a new car and as our current car was purchased new in 1999 and has now done nearly 200,000km it is nearing the end of its economic life. The new car needs to offer about ten years service and I'm looking at getting the latest technology, versatility and economy in both fuel use and servicing.

It is apparent that diesel vehicles have come ahead in leaps and bounds over the last few years with all three performance criteria, - power, emissions and economy along with servicing costs now matching and even exceeding that of petrol vehicles. The price premium is now less of a feature in making a choice than it used to be with some good deals around.

My consternation is at the amount of road tax charged at $44.31 up to 2 tonnes which when factored into the running cost makes a diesel the same cost to run as a petrol equivalent. Taking the Ford Mondeo Turbo-diesel as an example, the road tax almost exactly negates the fuel economy advantage to the point where it costs the same per kilometer as an equivalent like the Hyundai i45 or Suzuki Kisashi.

Where is the incentive to buy more economical, lower polluting, more efficient cars? In the Mondeo, we have a 2lt car making 320NM of torque that gets 50mpg, (5.6l/100km), yet is handicapped by fuel tax to the equivalent of 37mpg, (8l/100km). I was putting the Mondeo at the top of my list despite the price premium, but now the Hyundai or Suzuki are the better value cars.

Why is this anomaly here and what if anything is the Government likely to do about it?"

**AllanB** · 5th May 2011, 15:44

My Tickford XR6 likes fuel.

Actually on the open road it is pretty good for a big engine. Bit sucky around town though.

I think you have stumbled on their plan - there is no real advantage anymore as the fuel companies like to inflate the diesel price.

And there is an will not be any government incentive - unless the greens get some power (then we are stuffed).

If there was a economy incentive then surely it would apply to motorcycles.

**Scuba_Steve** · 5th May 2011, 15:51

Mini's already pointed this out didn't they? Thought they were hitting them up because 2 mini's exactly the same model except 1 was petrol & 1 was more economical & diesel. They're complaint was their more economical diesel cost more to run in NZ then the less economical petrol model despite using less fuel & being (arguably) better for the environment

I might have got it wrong but I'm pretty sure that was the deal?

**bogan** · 5th May 2011, 16:05

Just to clarify, isn't the fuel tax you talk of for diesel, already put on petrol at the pump, surely any comparison they should both have it, or neither?

**george formby** · 5th May 2011, 16:09

Originally Posted by Scuba_Steve

Mini's already pointed this out didn't they? Thought they were hitting them up because 2 mini's exactly the same model except 1 was petrol & 1 was more economical & diesel. They're complaint was their more economical diesel cost more to run in NZ then the less economical petrol model despite using less fuel & being (arguably) better for the environment

I might have got it wrong but I'm pretty sure that was the deal?

Yup, diesels clean up at the annual Aucks to Welly economy rally before RUC is factored in. Then a petrol wins, go figure.

Something mentioned a couple of years ago on this subject was the risk of NZ becoming a dumping ground for oil burner imports, nullifying the economic & environmental benefits.
No doubt a cop out, they just need to incorporate basic efficiency standards to make it work.

Good on ya for using your keyboard for something constructive Edbear.

**avgas** · 5th May 2011, 16:17

Originally Posted by bogan

Just to clarify, isn't the fuel tax you talk of for diesel, already put on petrol at the pump, surely any comparison they should both have it, or neither?

Nope - Diesels pay about 150% of the tax of petrols (I have owned both).
The original reasoning was that trucks were ripping up the roads so it cost more to have trucks on the road. But now since the engine is in cars there is not much point of having such a high tax rate in RUC for passenger vehicles.

**Edbear** · 5th May 2011, 16:19

Originally Posted by Scuba_Steve

Mini's already pointed this out didn't they? Thought they were hitting them up because 2 mini's exactly the same model except 1 was petrol & 1 was more economical & diesel. They're complaint was their more economical diesel cost more to run in NZ then the less economical petrol model despite using less fuel & being (arguably) better for the environment

I might have got it wrong but I'm pretty sure that was the deal?

I compared two Hyundai ix35's the diesel and the 2.4lt petrol. The diesel has more power and torque and better economy, - 130kw petrol, 136kw diesel, 226NM petrol, 390NM!!! diesel, but add the road tax and the running cost is greater by 1lt/100km equivalent. The Ford Mondeo, comparing the diesel with the 2.4lt petrol, still sees the diesel slightly ahead including road tax simply because the petrol isn't as economical as the Hyundai i45 or Suzuki Kizashi, both 2.4lt petrols.

So to choose, the Kizashi and i45 cost the same to run as the turbo-diesel Mondeo with about a $5k price advantage against the top line Mondeo Titanium which has the same features. The Suzuki I'm comparing is the Sport which adds AWD and 3-way driver's seat memory to the mix over the other two. All three have heated leather seats, dual-zone climate air, etc. All three outdo the Subaru legacy in features/value for money.

In the smaller cars, only the Honda City measures up to what I want. A brillant wee car! It is dearer than the others but despite that I think the difference is worth it.

**avgas** · 5th May 2011, 16:19

Originally Posted by george formby

Something mentioned a couple of years ago on this subject was the risk of NZ becoming a dumping ground for oil burner imports, nullifying the economic & environmental benefits.
No doubt a cop out, they just need to incorporate basic efficiency standards to make it work.

Yep, RUC won't fix anything. You can buy it online.
Scrap half the RUC and put one simple test in a WOF sheet.

**p.dath** · 5th May 2011, 16:21

How much petrol and diesel does a litre of crude oil make?

It may be possible that while you use less litres of diesel to travel a certain number of km's, that perhaps the resources needed to make that litre of diesel aren't any cheaper.

I have no idea. Just saying their might be complicating factors that aren't obviously apparent.

**avgas** · 5th May 2011, 16:21

Ed, if you get a ford TDCi - get an auto.
My manual is a horrible POS. The computer is just horrible and designed for auto's.

**avgas** · 5th May 2011, 16:23

Originally Posted by p.dath

How much petrol and diesel does a litre of crude oil make?

When they separate crude at a refinery. From recall they get 10% pure shit.... 40% petrol, 35% diesel and they recycle the rest.
So you will always have both, or really expensive petrol (as you would have to keep re-refining it).

**Scuba_Steve** · 5th May 2011, 16:40

Originally Posted by avgas

When they separate crude at a refinery. From recall they get 10% pure shit.... 40% petrol, 35% diesel and they recycle the rest.
So you will always have both, or really expensive petrol (as you would have to keep re-refining it).

My understanding also is diesel requires less refining & thus cheaper to produce too

It just comes down to our Govt just sees vehicles that are cheaper to run or more economical like bikes & diesels as vehicles to be heavily taxed so they can make more money for themselves

**Edbear** · 5th May 2011, 16:45

Originally Posted by avgas

Ed, if you get a ford TDCi - get an auto.
My manual is a horrible POS. The computer is just horrible and designed for auto's.

Yup, it was always going to be an auto for practical reasons anyway. That ruled out the Focus and Fiesta diesels as they only come in manual. The diesel Rav4 also only comes in manual as does the Subaru Forrester.

Reports reckon one of the best things about the Mondeo is the auto, a 6 speed twin clutch tranny. Did you know the TDCi motor and trans are Peugeot?