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The government is stepping in to stop the cost of petrol rising further, even though the move may mean it has to compromise on its climate change goals.
Petrol prices are stinging the average motorist and moves to discourage the use of cars were threatening to push prices higher. But plans for a hefty new regional petrol tax to fund electric trains in Auckland have been slapped back.
"I can assure you that any suggestion of the Auckland region slapping five cents on the petrol next year is absolutely ridiculous - that is not going to happen," Prime Minister Helen Clark says.
But if the region wants the trains a smaller, more gradual tax will still be needed.
"Without that tax in Auckland we cannot fund electrification and that would be a major setback. It would be quite a bad response to the prospect of all prices remaining very high and challenges around climate change," says Finance Minister Michael Cullen.
Ever rising petrol prices have finally prompted the government
to investigate whether price monitoring can be strengthened to get
a better deal for motorists.
Commerce Minister Lianne Dalziel says she plans to meet with the
Automobile Association to discuss making sure that competition and
consumer issues are addressed.
And some aspects of climate change policy will be delayed as fears mount about their impact on the cost of living.
Transport was going to come into the emissions trading scheme in January 2009, adding up to eight cents a litre to petrol but ONE News has learned that will be delayed until 2011.
National Party leader John Key says the Prime Minister is in "full retreat mode".
But the PM is still wary when it comes to the oil companies.
"I'm a bit suspicious of big companies in the oil field where everything seems to work synchronised rather than have competition...I'm reflecting the suspicion of the ordinary punter," she says.
The government is now considering closer monitoring of petrol prices to address the suspicions of the travelling public.
Clark says the government is conscious of the financial pain motorists are suffering. She says in parts of Australia the monitoring of petrol prices is done on a daily basis while in New Zealand it is done weekly.
The PM says Dalziel wants to talk with the AA about where NZ's monitoring might go. Dalziel has a report by the Australian equivalent of New Zealand's Commerce Commission on fuel prices and Clark says the government will see if it contains anything useful for NZ.
"It might be on the margin but everything helps," Clark says.
She says the Ministry of Economic Development, which watches petrol prices weekly, thinks oil company margins have been pretty consistent, but motorists are suspicious of the companies.
ONE News understands the government will soon come out with a new timetable for the emissions trading scheme which reflects concerns about the rising cost of power and petrol.
