John MacDonald: The fairest way for businesses to recoup fuel costs

This fuel situation is starting to feel like herding cats. 

You’ve got the government, on one hand, going on about seven weeks supply. Don’t panic, keep calm and carry on. 

The government is also talking about this rescue package for low-to-middle income earners.  

Then you’ve got the hoarders filling up drums and jerry cans with petrol and diesel. I met one on the weekend. 

He was doing the drums and the cans but he was also using the fuel tank in his boat for storage. He was a tradie and said all the farming mates he was out with are doing the same.  

And now we’ve got businesses deciding to take their own course of action, and some are either putting their prices up or adding fuel surcharges. 

One in Christchurch has just announced that, unless customers go to them, they’re going to have to pay an extra $5 while the fuel prices remain high because of the situation in the middle east. 

It’s even offering free finance options for people with a community services card. 

Didi, the rideshare outfit similar to Uber which operates in Auckland and Wellington, is also introducing a fuel surcharge from Wednesday. Charging passengers 5 cents per kilometre. 

Which raises the question: is this reasonable, given we’re all in this boat together? 

My view is that a specific surcharge is much more reasonable than a random increase in prices. 

There’s a pie shop in the nelson area that has just announced that the prices of its pies are going up 50 cents. 

The owner of the shop says the increase is happening immediately, and she’s doing it because the fuel prices have increased her costs by 20 percent. 

She says she has no option. 

The thing is, though, how do customers know her costs have gone up 20 percent? How does the bakery owner know that charging 50 cents more for a pie is what’s needed to cover that increase? 

And more to the point, when this is all over and the fuel prices are down again, are the pies going to be 50 cents cheaper? I bet they won’t be. 

Which is why I think a temporary surcharge is a fairer way of doing it. 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Mornings podcast with John McDonald
from News Talk ZB.

Speaker 2 (00:13):
This fuel situation is starting to feel like herding cats.
You got the government on one hand going on about
seven weeks supply, don't panic, keep calm and carry on
and talking about this rescue package for low to middle
income owners, although I've got to say it's dragging this
one out, isn't it. You might have seen the shots

(00:35):
of Finance Minister Nikola Willis at Marston Point yesterday in
the overalls and the goggles in the helmet. It had
that kind of announcement of an announcement thing written all
over it. So you got the government saying it's going
to do something, and then you've got the hoarders filling
up drums and jerry cans with petrol and diesel. I

(00:56):
met one actually on when I was out on Saturday night.
Met a hoarder. Ah, you're a hoarder. He's doing the
drums and the jerry cans, but he's also using the
fuel tank in his boat for storage. I think the
jet ski is being used as well. He said he
was full of it. A trade, that's what he does.

(01:16):
And then he said all the farming mates he was
out with, they're doing the exact same thing. And now
so you've got the hoarders, you've got the government apparently
doing something. See why, it's like herding cats. And now
we've got businesses deciding to take their own course of
action and some are either putting their prices up or

(01:38):
adding fuel surcharges. So one of these businesses doing the
surcharge thing is an outfit called Peace of Mind. It
limited in christ Church and it's just announced that unless
customers go to them, unless you go to them, they're
going to charge an extra five dollars while the fuel

(02:00):
prices remain high because of the situation in the Middle East.
It's even offering how about this. I don't know whether
this is generous or crazy, but it's even offering free
finance options for people with a Community Services card. Is
a ride share outfit and which is similar to Uber
which operates in Auckland and Wellington. They're also introducing a

(02:22):
fuel surcharge from Wednesday, so they're going to be charging
passengers five cents per kilometer, which raises the question. This
is the question is this reasonable given we are all
in this boat together. Now my view is that a
specific surcharge is much more reasonable than a random increase

(02:44):
in prices. Let me give you an example. So it's
happening everywhere. There's a pie shop in the Nelson area
that has just announced that the prices of the pies
are going up fifty cents. And the owner of the
shop says, the increase is happening immediately, and she's doing
it because the fuel prices have increased her costs by
twenty percent. She says, you got no other option. The

(03:04):
thing is, though, how do customers know that her costs
have gone up twenty percent? How does the bakery owner
know that charging fifty cents more for a pie is
what's needed to cover that increase? And more to the point,
and this is the critical point, more to the point,
critical point, when this is all over and the fuel
prices are down again, do you reckon the pies are

(03:27):
going to be fifty cents cheaper? Bet? They won't. Which
is why I think the temporary five dollars surcharge that
the community or the computer support business in christ Church
is charging, I think that that is the fair way
of doing it, because it would be very difficult, wouldn't
it for a business to keep charging a fuel crisis
surcharge when the fuel crisis is over and when the

(03:50):
prices are back to normal. But what do you think.
Do you think it's reasonable for businesses to charge fuel
surcharges while this fuel crisis goes on or do you
think they should be charge lodging anything at all? Should
they just be absorbing the costs? And which is fairer? Surcharge?

(04:12):
Will just increase the prices by fifty cents a pie?

Speaker 1 (04:16):
For more from Category Mornings with John McDonald. Listen live
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