Record fuel prices are the most visible increase in the rapid rise of the cost of living, and Clutha Budget Advisory Service co› ordinator Lee›Anne Michelle says her office is responding to record community demand.
On Monday, a litre of 91 octane petrol was $2.96.9 in Balclutha, up to $3.30.9 in Queenstown and had reached as high as $3.37.9 in Auckland.
Last week, Prime Minister Jacinda Ardern described changes in lending, pandemic effects on production and supply, and Russia’s attack on Ukraine in affecting global prices as ‘‘a perfect storm’’.
Fuel consumers at Balclutha pumps on Monday seemed well informed on the situation.
‘‘Russia tripled their price to recoup against the sanctions put on them,’’ tradesman Michael Graham said.
‘‘If the Government spends all their fuel tax on roading, they’re not spending much of it around here. Fuel goes up, the price of everything goes up, but only minimum wagers have had a pay rise,’’ contractor Fred Brogue said.
However, about 4pm on Monday the Government announced it would cut its tax on fuel by 25c a litre for the next three months – and slash public transport fares by half.
The change for petrol took effect at 11.59pm that day.
Fuel prices are central to freight transport companies, who will welcome the tax cut.
Those contacted by Clutha Leaderhad insisted on not being named as they indicated all they could do was pass the overall increase in cost on to customers, some of whom could not keep up, and one had described the state of business as ‘‘critical’’.
The news will be a temporary relief for many but the travel discount will do little to alleviate the stark increase of mortgage rates and the steady climb of council rates.
Clutha Mayor Bryan Cadogan was aware of the situation.
‘‘We are seeing the highest inflation in a generation. One update showed stormwater projects ballooning from $600,000 to over $1,600,000 which shows the rigour that will be required to meet expectations on levels of service.
‘‘For a decade, CDC has delivered the largest core infrastructure upgrades while remaining under our self› imposed rate cap, and we need to maintain this.
‘‘Population growth gives us greater resilience, but staff and supply shortages coupled with inflation place challenges on this time of growth and delivery of projects.
‘‘Councils have a moral responsibility to align costs with ratepayers’ ability to pay, and the challenge is to balance this with ever›increasing expectations.
‘‘We appreciate input. To truly influence rates, everyone needs to engage in the annual plan process,’’ he said. Inflation is at 5.9% with basic produce having the highest increases, and electricity providers signalling rises.
Ms Michelle said she was working with the real›world effects.
‘‘We are busy and expect to get busier. Benefits increases aren’t keeping up with rents, mortgages, food and fuel. South Otago already pays 36% more than the national average for power and 40% of consumers are about to be hit by the scrapping of low›user rates.
‘‘We’re regularly approached by families who are hundreds of dollars in arrears and we are worried about how people will cope this winter.
‘‘We’ve had a massive increase of people coming in for KiwiHarvest food. One day we gave out 40 food parcels to feed over 200 people.’’
She encouraged everyone to think and act seriously about facing up to economic challenges.
‘‘Shop online for the best power rates and set up Smoothpay. Menu›plan and shop smarter with food in season, grow vegetables at home, utilise the Community Garden.
‘‘Pay your rates along with your income. Save petrol by ride› sharing and planning essential trips,’’ Ms Michelle said.