While petrol prices have eased from the highs we saw earlier in the year, international political problems and constrained supply are now putting the squeeze back on for diesel. This adds further pressure and uncertainty for road transport operators.

There is reduced refining occurring in China and India and on top of that, it is now autumn in Europe and the United Kingdom, and countries are planning ahead for a cold winter. If Russia continues to constrain, or threaten to constrain gas supply, then European countries dependent on that gas need to stockpile other fuels, including diesel. And it is what is beginning to happen. There are reports of up to 25 percent less diesel being available than usual. It’s a classic supply and demand issue, and our industry is feeling the impact.

We are still concerned about the ongoing pressure on operators, who must pass increased costs on to their customers – as you would expect any business to do. Transporting New Zealand can offer advice on this to members, including the Grant Thornton Index (which is also on sale to non-members) to help operators track their costs. We also offer a series of fuel schemes, which can help operators achieve significant savings. At a time when we need to be saving every dollar that we can, it is worthwhile being on a fuel scheme, having a discount card such as our n3 card, and taking advantage of our tyre discounts. To ensure you are fully accessing all the services available to you, please don’t hesitate to get in touch with Transporting New Zealand.

The government also needs to be thinking now about extending fuel tax relief for operators and consumers. At present, the road user charges discount, as well as the fuel excise discount of 25 cents a litre, are due to end in January. We believe these discounts will need to continue. The idea that the volatility we are seeing in the international oil market, and the overall volatility we are seeing in the world, will all be over in January, is unrealistic. We know from the survey we did a few weeks back that 40 percent of operators who responded said their costs had been eased by the RUC discount. With a general election next year, we believe a sudden hike in prices is unlikely, but we are going to again push for the discounts to remain.

More fuel-efficient driving and new vehicle technology also help save fuel. The internal combustion engine is still improving and becoming more efficient, even if it doesn’t have a long-term future. Some years ago, EECA (The Energy Efficiency and Conservation Authority, Te Tari Tiaki Pūngao) alongside the then Road Transport Forum, developed a fuel-efficient driving programme. This resulted in significant fuel and emission reductions, but it was never really taken up by the industry. We are looking at bringing this programme back, as part of our wider environmental responsibility as well as for cost reasons, so expect to hear more on this over the next few months.

Extreme weather is still causing issues for operators, for example, in Northland with SH1 up to Kaitaia, and in the north of the South Island with SH6 and 63. There’s going to be restricted access on those roads for some time, and we are also concerned there is going to be more severe weather rolling in in the next few months before real fixes can be brought about. These are concerning times for our operators in terms of road conditions and maintenance. We spend a lot of time pressing Waka Kotahi and the media about this issue, and we also talk to local communities and councils to put the case for road transport in their design thinking and road maintenance. We would still like to see photographic evidence of where roads are in a really bad condition so we can continue to make a strong case to fix them.

You can also listen to an audio version of Nick talking to David Killick here.

By Nick Leggett, chief executive of Ia Ara Aotearoa Transporting New Zealand.