The regional fuel tax (RFT) came into effect yesterday and will used to fund a wide range of projects over the coming decade. But it will also be interesting to see what impact it might have on how people travel. Will we see more people looking to catch public transport, walk or ride a bike?

How do fuel prices compare

From what I’ve seen, the immediate aftermath of the introduction of the RFT has seen petrol prices jump to around $2.30 per litre. This puts the cost of fuel at or close to the highest it’s been – but we’ve had fuel at similar levels before. This shows the weekly price of fuel over the last 14 years.

Over the same timeframe we’ve seen huge increases in the use of public transport and more recently cycling. But one thing that is notable is that use alternative modes of transport continued to increase strongly even when fuel prices fell.

So what impact do fuel prices actually have?

NZTA Research

The NZTA has an ongoing research programme that looks at aspects of the transport system. Back in 2013, they published this research from titled Econometric models for public transport forecasting. It is described as:

This paper presents the findings from an econometric analysis of public transport patronage growth for a selection of New Zealand cities: Auckland, Wellington, Hamilton and Tauranga. The primary objective of the econometric analysis was to provide an explanation of historic growth patterns and, in doing so, provide up-to-date public transport elasticities for use by transport planners and policy analysts.

Here are some of the key findings.

  • On the Auckland bus network, a 10% increase in real fares caused a 3% fall in patronage and a 7% increase in revenue. The impact of fare increases on the Wellington bus network varied by situation and appeared to have been distorted by the introduction of the SuperGold Card. Fare increases on the Hamilton bus network had no discernible impact on patronage.
  • On the Auckland rail network, a 10% increase in real fares caused a 9% fall in patronage (during the peak) and hence only a 1% increase in revenue. Similarly, on a Wellington rail network, a 10% increase in real fares caused a 7% fall in patronage and a 3% increase in revenue.
  • There was strong evidence of complex and non-linear responses to petrol prices, ie the crossing of the $2.00 nominal petrol price in 2008 was associated with a ‘jump’ in patronage.
    • After controlling for the ‘threshold effects’, general petrol price moves had a modest impact on patronage in Auckland and Wellington – a 10% increase in real petrol prices caused a 0-2% increase in patronage.

The RFT equates to less than a 5% increase in the price of fuel so does that mean perhaps about a 1% increase in ridership. Or will the nature of the RFT, coming all at once and covered extensively by the media will have a similar effect to petrol passing $2 and see a lot more people reconsidering their options?

The analysis is also interesting when we think about what’s been happening with PT use – for example does it help explain why growth of the rail network has stalled over the last few months following the increase in PT fares?

One thing that is certain is that we now have a lot more, and more accurate data from when this research was undertaken. With HOP, AT and/or researchers should be able to much more easily see how usage changes in relation to things like fuel prices, fare changes and service improvements. With the case of the RFT in particular, it is coming at a time with fewer other factors driving usage so could provide a fascinating case study, especially when we think about the impact that road pricing could have.

Below are a few of the metrics we’ll be keeping an eye on.

Public Transport Ridership

As we know, ridership on PT has been growing strongly for many years and the data for May shows that trend continuing. There were the same number of working days in May-18 as May-17 and overall ridership for the month increased by 4.5% and is up 5.6% on a 12-month rolling basis. Within that:

  • Bus use been leading the way this year and May continues that trend, increasing by 7.3% for the month and is up 6.5% on the 12-month measure
    • That includes the Busway which increased by 11.9% for the month and is up 12.2% annually.
  • Rail trips have been flat this year and in May fell by 3.2%, however the network also saw significant disruption after the derailment of a train in Britomart. Over the 12 months usage is up 4.5%.
  • Ferries have also been flat this year and fell by 0.1% for the month. On a 12-month basis they’re up 0.2%.

Cycling trips

Like PT, bike counts have also been showing good growth with levels above population growth. Auckland Transport now has 40 automated cycle counters around the region. The oldest ones have been in place since late 2010 and they’ve been adding new ones when new cycleways open. If we compare the total number of trips on all counters that were active a year ago with the same counters in May we see there was a 6.4% increase in trips. On an annual basis, those with at least two full years of data, there is 6.5% increase.

Some counters are still showing excellent growth, such as the NW Cycleway at Kingsland which is currently growing at about 15% annually and is only likely to get more popular soon when the Ian McKinnon cycleway opens up, removing the climb up to Newton Rd.

The data for the Quay St cycleway counter just west of Albert St is even available daily.

City Centre counts

For some time now, AT have been counting how people enter the city each morning and the data has been collected monthly since the beginning of 2015. Over that time, the number of people entering the city in the morning has remained relatively static but how they’ve arrived has changed noticeably. Fewer people have been arrived by car and since May last year that dropped to less than 50% of people. The graph below shows the 12-month rolling average but in March this year, the number arriving by PT was actually higher than those by car.

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  1. The fuel tax goes up. You’d think this would be a great time to push PT. Nor the clown cart that is AT.

    AT decide to cancel Southern Linetrain services with no notice, no explanation and no help at Newmarket beyond some poor bugger who took it upon himself to roam the platform telling people “You’ll have to catch a bus”.

    As of 7.30am, nothing on their twitter. On top of kidnapping and holding a trainload of passengers hostage for three hours plus the other night with zero information.

    When will AT learn to improve it’s communications?

    1. Unfortunately never it is seems. Recently the trend is to turn of the Passenger Information Displays when people actually need them and tell nobody anything. You also still have to look in 3 or 4 different places for whats going on… assuming they put it anywhere at all. I.e. twitter, facebook, TransDev’s OneComm SMS notifications, a banner on the website, the AT Metro app or service info on the website. This was meant to be all integrated under OneComm but it never happened.

      Also the other wonderful thing is trains finishing around 22:00 every night (Sun-Thu), no thought to those finishing or starting any later than that. Plus apparently the only extra late services they are adding on the next timetable will only be on a Friday night… which already has service to around 00:20-00:40…

      I have waited eagerly for a later timetable through around 5-6 timetable changes – never happened. Despite multiple requests over the years. So yeah… I gave up with AT quite a while ago. I mostly drive or cycle now, because at least those modes are dependable (short of road conditions – which I can live with better than being treated like a sheep that AT doesn’t care about).

    2. I am going to take an educated guess that if that happened this morning that there has been an “incident”, red signal passed, breakdown, etc. There is always always a vacuum when this happens that no one seems to want to address.

        1. KiwiRails maintenance budget has been quite limited and really not in keeping with a modern metro system, its more of a hybrid of the old and the new. Where exemplary systems going into fast heavy repair mode in between the finish and the start or services our system puts off the evil day until Christmas shutdowns.

          And track faults and speed restrictions can last for years at times, the lead into the curves at Britomart having worn points for years but not repaired because the speed restriction was not detrimental.

          Maybe just maybe the fuel tax will sort this out!

    3. The Meadowbank situation is unbelievable: “Safety was our paramount concern in this situation and this was the best way to handle it in these circumstances.” No, AT, that’s crap. You’ll get safety issues if you don’t let your staff and passengers know what is happening. Responses to imagined reasons for the situation (terrorism or criminal elements), and also to perceived injustice (hungry, can’t pee, no-one’s showing any respect by informing us) can be quite wild.

      AT, in this situation, your lack of information increased the danger to pedestrians.

        1. And drinking water? In the heat of summer, this is the sort of thing that would bring on dehydration in pregnant women, leading to premature labour. As one example.

    4. AT – are you listening? We know that you all read this blog, incessantly, but are you under a public gagging order? If so, it is time for you to break that rule, and publicly respond. Your silence is stupid and makes you look even worse than you already appear to be. Is there a Public Relations Officer at AT? Who is that? Why are they not responding? Get off your arse and do something about your appalling attitude and respond!

      You’re a public service. Act like it. Serve the Public!

    5. I’ve deleted the texts now but I was getting texts prior to 0730 that alerted me to a track fault. The penultimate one advised that Southern trains were running via Panmure express to Otahuhu.

      It was also on Facebook.

      All of this, however, begs the question as to what the h**l is KR using the millions AT pay in track access charges for

  2. We really need a vkt measure too, for proper monitoring. I would have thought this was something NZTA would have prioritised to provide good data for all sorts of reasons.

    1. Yes; really critical data. It must be easy to produce – WOF and car registration records include all that is needed (dashboard reading + address).

      VKT by meshblock should be a doddle.

  3. As someone suggested last week both AT and the government could show some real quid pro quo and good faith and increase the subsidy to PT and lower fares all round and possibly even have a half fare for Community Service card holders. But there is a politically naive deafening silence from the Phil’s, specially Twyford who appears oblivious to the dangers of the tax’s beneficial time lag!

    The tax going on big time is not going to produce anything in the tenure of this government that any of us will notice making it so easy for the next government to get rid of it.

    1. Agreed (I think that was me you were thinking about). Twyford needs to tie the increased petrol tax to a decreased PT price. Or, as you say, the next Government could easily undo the tax. But if there was a PT price cut at the same time, any government coming in would have to raise PT prices at the same time as cut the tax, and that would be a difficult thing to do in terms of PR….

    2. I think it will be very hard to undo this fuel tax, I don’t think there has ever been a fuel tax reduction in NZ. By 2020 there will likely be projects already in the pipeline that require this funding in years beyond 2020, just like the existing fuel tax is continuing to pay for already committed projects.

      1. Its easy, “we’ll cut the greedy fuel tax that Auckland Council takes and pay for transport improvements using the consolidated fund”

        I think that was the rationale last time when National overturned the proposed regional fuel tax, hence the delays on electrification, hence the half billion dollar bill Auckland rate payers got anyway and it was total bullshit of course but enough people fell for it then and will fall for it again!

        1. That tax had never been implemented, it’s a different story scrapping an existing tax. I don’t think saying to the taxpayers from the rest of the country that they will use the consolidated fund to replace and Auckland fuel tax is the way to electoral success.

  4. There was a suggestion at a meeting recently that AT installs large LED display boards showing cycle counts, to make it better known how many cyclists there are on certain roads. The suggestion came from someone who had believed there weren’t many cyclists on a particular road and was surprised to hear the cyclist count.

    Obviously LED display boards, at $20,000 a pop, are a waste of money. But I think the sentiment was a good one – how could AT make the cycle counts much more visible to the public? Could the Herald have a section every day showing a selection of counts and graphs? Could it be what’s on the home page for the AT journey planner? (which, incidentally, still doesn’t include cycling as a valid transport choice).

    1. They could use the overhead signs on the causeway – use NZTA’s vehicle counter (x 1.2), AT’s HOP data for buses using the motorway, and the cycleway counters. They could even compare journey times (say, Te Atatu Rd to Nelson St).

      1. What a good idea. Person counts and travel times Te Atatu Rd to Nelson St by three different modes: bus, driving, cycling. I’ll take that back to the group to see if they think we should recommend it to AT. 🙂

  5. I would like Canterbury to have a regional fuel tax or some other targeted revenue source to fund an increase in transport choice for the region. Christchurch is a desert for public transport use in NZ. The city has a huge donut problem -the periphery benefits from growth while the middle pays in congestion. My solution, is to learn the lessons from Auckland and is as follows;

    1. There are more buses than trains, so therefore more people have the option of taking a bus than a train. People can only respond to the options that are available to them. You could put the petrol price up 200% overnight, and there would still be a sizeable number of people who drive in, because they have no other option.

  6. Auckland Transport. Communications are vital to your customers/clients when you cancel public transport services. Doing nothing is not an option! People need choices & solutions to travelling around Auckland by Public Transport. Electronic notice boards & Verbal announcements of cancellations should be immediate & clear to all. Also give the public other transport options for getting to their destinations when a service, such as a train is cancelled would benefit users. AT please push & advertise the advantages of using public transport when fuel prices go up.

  7. Filled up outside Auckland on the way home yesterday. No worries.
    Must be very busy at the Mobil in Mercer nowadays.

  8. Does help with the media running scaremongering stories with people making outrageous claims with no facts to support them. TV3 ran a story about a solo mum from Weymouth claiming the fuel tax will mean $40 less to feed her two kids – if didn’t state a time period, or how the figure was arrived at. 11.5% is roughly an extra 24c per litre (91 was $2.09 at Pak’n’Save Licoln Rd on Saturday), so to spend an extra $40 would require buying 167 litres of 91, which should be enough to drive over 1500km in a people mover (or about 215km per day). Since Weymouth is around 30km from the CBD, the extra cost would be about $10 per week. Maybe $20, if she does a similar amount of driving for non-work purposes.

    1. Except poor people are more likely to be driving older, less fuel efficient cars, so they’ll be disproportionately affected by this feel good tax.

      1. There was an article in the Herald last week that largely disproved this. It showed the fuel spend was greater in higher income households, most likely because there is a lot more discretionary fuel use and larger vehicles used in higher income households.

        1. That article used an ‘unusual’ definition of regressive, and was full of logical errors. The group of people in the lowest decile will _on average_ pay around half the amount that those in the highest decile will. That is very different from disproving that poor people will be disproportionately affected by the RFT.

        2. That’s a fair call. However, I do think it disproved a widely held believe that those on a lower income pay more in fuel tax as they drive older cars and have to drive to work as they don’t have access to PT.

        3. If they have cars, they are older. So they pay more _per km travelled_ (extra regressive!). And proportionally more are in the situation of there being no viable PT for their work travel. These important facts aren’t visible when you look at average fuel use (including non-work) by decile.

        4. I agree with those facts, these of course all apply to the existing fuel tax as well. However, the extra costs of running an older car are generally factored into the price when you buy it, a true analysis would need to factor this in. From past experience it is very hard to sell an old gas guzzler when fuel prices are high, the market is definitely sensitive to this.

      1. My bad, so that means $40 equates to 350l of fuel, or 3,500km at a typical 10l/100km fuel usage.

        From observation, many of the poorest families have large people movers, so their fuel use may be similar to wealthier families who drive large SUVs by choice.

        As an aside, was in Pokeno yesterday, and noticed the Z truck stop was doing a roaring trade. Hope all those truckies topping up there to avoid paying the regional fuel tax realise that they have lost their right to complain about congestion in Auckland.

  9. I see the Road Transport Forum is recommending it’s members refuel outside Auckland, or add the levy on to their freight rates. In other words, they want the benefits of reduced congestion, but want to be subsidised by car drivers.

    1. Correct, my transport manager just uploaded a list of garages to use for filling and those to no longer use. Only if urgent and then a minimum fill if any in Auckland need to be used. He does not plan to increase freight rates but will review in a few months.
      Didn’t you expect people would do everything possible to avoid this petrol tax?

        1. Previous fuel price increase would usually, eventually, result in increased freight rates. Boss sees it as unreasonable to hike prices for customers outside Auckland even though freight is to or from Auckland when the option for lower price fuel exists outside Auckland.
          An additional task for her is to assign trucks on routes that give them the best opportunities to fill fuel outside Auckland fuel levy area.
          She is already working it and Bryan, FYI, we avoid mway rush hours and congestion.

        2. I guess people who consume less and who source what they need locally will not need to contribute as much to this tax, then, than people who shop as entertainment and feel they have to have the latest everything. People who keep life simple, who buy from the local Mercy Hospice store, who contribute to the local community garden in exchange for produce, and cook for themselves, for example, will not pay much through tax on freight. That’s a progressive step.

        3. I wonder if more trucks will get larger fuel tanks fitted? An extra 100 or so litres weighs nothing for a truck but provides another 200km of driving (enough to do business around Auckland for a few days then fill up when next out of Auckland)

        4. Cathy Casey didn’t think they would!

          My response was be wary of the law of unintended consequences

      1. It’s quite legitimate for linehaul operators to avoid paying the tax as the majority of their driving will be happening outside of Auckland anyway. There will of course be some local operators that work near the boundary that take advantage of the difference, but this will be a relatively small proportion of companies.

        I expect over time the prices near the boundaries will smooth out anyway.

      1. Ha! I doubt anyone will shift to a lower-energy garden management style because of this tax, but we can always live in hope. There’s plenty of information out there to help them when they do get that aha moment.

        1. He he. Or free range guinea pigs. They keep it short. Maybe not in excellent order, but short.

  10. While I agree that the road v public transport debate is important, there is another element to this that is important in overall outcomes for both the environment and the economy. Putting the price of fuel up will also encourage people to buy more economic cars. When you allow for inflation the real price of NZ fuel has actually dropped a lot in recent years. End result? Five of the top ten selling “cars” in NZ are actually FWD utes, most weighting two tonnes or more. Combined with what we now know about real world emissions and fuel consumption compared with manufacturers claims/lies, our average fuel usage and emissions per vehicle may be getting worse, not better. Ian Polkinghorne had a good post on this back in 2014.

    So to all those who complain about fuel prices, stop buying two tonne trucks! Buy a Prius and save your wallet, as well as the planet, if you must insist on driving everywhere.

  11. The thing I have noticed in the 1st paragraph of the italics is that fares went up 10% passengers dropped 3% and all they made was 7% so why don’t they lower the the consession fares passenger numbers wold then go up and then they should be able to make more in fare revenue as the train/bus still costs the same to run wiether you have just 1 passenger or a full loading so that way more will get out of their vehicles .
    I have noticed this since 1976 when I 1st moved to Auckland as every time the fares rose the management moaned about the decrease in patronage and it’s the bean counters that never can work that one out .
    And if they want patronage i.e. families to use the system have a cheap family pass that can last all weekend not just 1 day as it is now .

    1. If fares went up by 10 % but passenger numbers only dropped by 3 % then it suggests that financially the best thing to do is raise fares. There are of course many other non-financial reasons to not increase fares.

      Lowering fares is definitely not a sure way of increasing revenue. There will be a whole lot of people who used to pay the higher fare who will be paying less, you will need a jump in patronage equal to the reduction in fares just to break even.

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