Photograph: Hagen Hopkins
New Zealand is halving public transport fares to ease the pain of sharply rising petrol costs, as fuel oil prices soar following Russia’s invasion of Ukraine.
The prime minister, Jacinda Ardern, announced that the country would cut fares by 50% amid a suite of other changes to try to ease sharp increases in the cost of living. The government is also cutting petrol excise duties and road user charges by 25c a litre – changes that will come in at midnight on Monday.
The finance minister, Grant Robertson, said the changes would last for an initial three months and then be reviewed.
“The global energy crisis has quickly become acute,” Ardern said. “We cannot control the war in Ukraine nor the continued volatility of fuel prices but we can take steps to reduce the impact on New Zealand families.”
Petrol prices in New Zealand are over NZ$3 ($2) a litre and have been rising sharply in recent weeks. Unleaded petrol has gone up 15% since the start of the year and is expected to continue to rise.
“In the long term we need to build greater resilience into our transport system so we are less vulnerable to spikes in the price of petrol,” Ardern said. “But for now halving the cost public transport will provide some families with an alternative to filling up the tank.”
Even with the changes, the government expected petrol prices would continue their upward trajectory, Robertson said.
“We do need to recognise that petrol prices are expected to continue to rise,” he said. “The Russian invasion of Ukraine is continuing to undermine and destabilise global energy markets and, added to the other inflationary pressures the world has due to Covid supply chain disruptions, this is sadly not over yet.”
The Ardern government has come under growing pressure to address rising cost of living in New Zealand, where households have faced significant increases in the cost of living and supermarket essentials.
Inflation in Aotearoa has hit a three-decade high, and is showing no sign of slowing. Inflation reached 5.9% at the end of 2021, and ANZ, the country’s biggest bank, expects it to continue rising in 2022. In February, fruit and vegetable costs were up 17% year-on-year.
New Zealand’s opposition has declared the country has a “cost of living crisis”. In recent polling, the Ardern-led Labour party fell behind the centre-right opposition, National, for the first time since the pandemic began.
