This week I had the pleasure of joining Katie Bradford on the New Zealand Herald’s Front Page podcast to talk about something every transport operator in the country is living with: diesel prices that simply won’t sit still.
Consider the ride. In February, just before the Iran conflict kicked off, diesel was around $1.80 a litre. By April it was over $4. Over the months that followed it eased back to $2.40, and operators began to breathe again. Then last week it shot back up past $3.30.
Spare a thought for the operator trying to quote a job, plan a fleet and make payroll in the middle of those swings.
At National Road Carriers I have seen the pain and the fear up close. Members come to us with one question: what are we doing with government to get prices down so they can survive?
The honest answer isn’t an easy one. When it comes to oil, New Zealand is a little cork bobbing on a volatile ocean of global shipments. Our consumption barely registers on the world stage. Like it or not, we are price takers.
There is some comfort. Earlier in the conflict there were calls for Road User Charges discounts. As we said at the time, RUC pays for the roads our trucks run on, so discounting it simply trades today’s relief for tomorrow’s potholes. Instead, the government will not proceed with the Fuel Excise Duty and RUC increases planned for 2027, and road maintenance will be topped up from the consolidated fund. That is real relief for operators, delivered without starving the network.
The best defence in operators’ own hands is one you know well by now: the fuel adjustment factor. Written into customer contracts, it follows the price up and down, so you are not left out of pocket when diesel spikes. If it isn’t in every one of your contracts, make that this week’s job.
Then there is the bigger lesson. New Zealand spends more than $6 billion a year on diesel. That is $6 billion of our economy riding on events in the Strait of Hormuz and decisions made on trading floors on the other side of the world. Every electric and hydrogen truck we put on the road takes a little of that exposure off the table and dampens the next swing.
We can’t calm the ocean. We can build a sturdier boat.
Justin
