Rising Fuel Costs A Risk To Falling Inflation Figures

Road freight peak body Ia Ara Aotearoa Transporting New Zealand is welcoming today’s news that the annual inflation rate for the September quarter has fallen to 5.6%. While the fall in the inflation rate is good news for consumers and businesses, Transporting New Zealand is warning that increasing fuel costs due to international upheavals could put more upward pressures on costs for businesses and families.

"It’s good for everyone to see inflation heading downwards," says Dom Kalasih, the interim CEO of Transporting New Zealand.

"Unfortunately, there are still significant cost pressures affecting the transport sector, with costs increasing by 7.1% in the September quarter alone, driven by soaring fuel prices. We’re going to see significant pressure on freight costs, which our members have no choice but to pass onto their customers. Fuel is the second highest cost element for our members after wages."

Kalasih says it is essential the incoming government helps to keep a lid on sector costs, including freezing road user charges (RUC) and fuel excise duty (FED).

"While we appreciate the pressure that the National Land Transport Fund is under, every increased cost our trucking members face must be passed through to consumers, who have enough to worry about. Road freight transport companies operate on razor thin margins, so our members aren’t in a position to absorb cost increases.

"It is vitally important that the new government maintain their commitment to pausing RUC and FED increases until cost pressures settle. Now isn’t the time to increase any charges that might see inflation get an upward kick again."

About Ia Ara Aotearoa Transporting New Zealand

Ia Ara Aotearoa Transporting New Zealand is the peak national membership association representing the road freight transport industry. Our members operate urban, rural and inter- regional commercial freight transport services throughout the country.

New Zealand’s road freight transport industry employs 33,000 people (1.2 per cent of the total workforce), and has a gross annual turnover in the order of $6 billion. This is part of a wider transport sector that employs 108,000 people and contributes 4.8 per cent of New Zealand’s GDP.

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