WELLINGTON: New Zealand’s petrol companies are welcoming a change to 20-year-old customs and excise law but want to make sure they don’t get blindsided by the way officials judge whether a blended fuel will attract more duty.
Customs New Zealand has been at loggerheads with fuel companies after a Supreme Court ruling in its favor over whether locally blended butane/motor spirit was another form of manufacturing on top of oil refining, attracting additional duty. That long-running case with Gull New Zealand cost the firm an unpaid bill of $23 million, and general manager David Bodger told Parliament’s foreign affairs, defense and trade select committee it led to tens of millions of dollars of additional duty flowing to the Crown from across the industry.
Crown accounts show excise duty charged on petroleum was $1.88 billion in the year ended June 30, 2016, rising 7.9 per cent from a year earlier and maintaining a pace of growth which has accelerated over the past five years. Petrol excise was $1.45b in 2011.
Mobil Oil New Zealand director Cameron Taylor echoed Bodger’s warning over the uncertainty around how motor spirit manufacturing was defined, saying it could lead to too much excise being paid, which would ultimately be borne by the end customer.
Z Energy also presented an oral submission; however general counsel Meredith Ussher said the NZX-listed fuels company was concerned about excise paid on petrol that evaporated during shipping, dubbing it “ghost fuel”.
About $900,000 of petrol evaporates during the shipping and never reaches a terminal, which Z submits shouldn’t attract a duty.
