Based on the average price of a litre of Shell Ultra 91 over April, May, June 2008 - $195.2, the price you paid at the pump is broken down in the following way: - 37% Taxes and Duties (Crown Consolidated Fund, National Roads Fund, Accident Compensation Levy, Petroleum Funds Monitoring Levy, Local Authorities Petroleum Tax, GST)
- 57% Product cost (Product, Shipping, Wharfage, Insurance)
- 6% Other Costs and Margins (Coastal Shipping, Terminalling, Road Transport, Overheads, Administration, Marketing Costs, Retailer Margin, Wholesaler Margin)
Diesel is New Zealand is less expensive than petrol, as diesel has lower direct tax component, applied to the pump price of the fuel. However, drivers of diesel vehicles do pay Road User Charges (RUC) that are based on the weight and number of kilometres travelled rather than being directly related to the product cost.
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The recent Government review into fuel pricing states: “…recent price increases are due to increase in crude oil (85%) and increases in taxes (15%). While there is week to week variation in refining costs and importer margins they have had no significant impact on the long term trend…” The price of oil, the main determinant in the fluctuations of petrol prices we’ve seen recently is affected by various factors. These include, but are not limited to: - Increasing demand for crude oil and refined product, particularly from developing economies such as China and India
- Limits in global oil refining capacity
- Geopolitical influences - political instability in oil producing countries can cause uncertainties around availability and has a significant impact on crude oil price volatility
- Currency fluctuations – at present, the weak US dollar
- Unpredictable / extreme weather events
- Seasonality Effects
- Import parity prices for refined products
- Competition - fuel prices fluctuate depending on the degree of competition within the local market.
The demand for crude oil and refined products is increasing, particularly in China and India. With the increased demand for oil and refined products, increased supply is needed to match demand. Shell is committed to finding and extracting new supplies of oil, now and in the future. However, considerable investment is needed to explore for new sources of oil and extract the oil from the source.
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