No easy ride

While consumers are downsizing in an effort to cut petrol consumption, the Government appears to have been left in the dust in terms of providing any incentives, reports Sam Stevens.

As the "poster commodity" of the early 21st century, oil, continues to cause geopolitical headaches, you can almost hear 18th-century Scots economist Adam Smith intoning from beyond the grave: "It's supply and demand, buddy".

Yes, bigger problems for the oil-reliant global economy loom, as demand overwhelms supply.

In April, oil giant BP estimated world production of crude oil had fallen by 130,000 barrels to less than 85 million barrels a day - the first such decrease since 2002.

To counter the deficit some OPEC countries upped their output. Saudi Arabia opened its taps to the tune of an extra 200,000 barrels a day, but all metaphors involving "drops" and "buckets" appear entirely appropriate.

Demand from emerging economies - such as China, India and Brazil - last month led the United States Government's Energy Information Administration to cheerily point out that world oil consumption is projected to grow by 1 million barrels per day in 2008, to more than 86 million.

While much about high oil prices is new - record barrel prices of more than $US140 ($NZ185.97) being the most obvious example - efforts to limit the impact of rising fuel costs are not. And of course the Antipodes has never been immune to such gobal ructions.

So, back in the late 1970s, as the effects of a global oil shortage deepened, the New Zealand Government imposed rationing here. Motorists, many of whom were already users of small capacity cars - remember Grandma's Morris 1000? - were told to keep their open road speed to 80kmh and register for a "car-free day".

Such highly prescriptive measures seem unlikely to be revisited today, particularly in an election year, but commuters are cutting hydrocarbon consumption of their own accord.

In line with national trends, traffic on the Southern Motorway near Burnside, Dunedin, was down 5% last month. Import figures for bicycles are set to exceed those of cars for the third consecutive year.

And motorcycle registration figures are showing just how flexible commuters can be when faced with rising transport costs.

Land Transport New Zealand says motorcycle registrations from January to April this year were up 14% on the same period in 2007, while car registrations were down 3%.

Its figures show a dramatic increase in the number of new motorcycles being registered. In 2005, 7654 new motorcycles were registered, last year, 11,426.

The recent additions take the number of licensed motorbikes in the country to 49,283, up by 30% on the 37,717 licensed in 2005.

While the rapid rise in motorcycle and scooter numbers is remarkable, there are historical precedents.

In 1971, 12,881 motorcycles were registered. In 1973 the figure jumped to 25,760 registrations.

In the late 1970s, following the second major oil shock of the decade, a similar trend occurred. In 1978 - think pre-Iranian revolution - 14,522, motorcycles were registered. In 1979, registrations skyrocketed to 21,558.

The highest number of registrations since records began in 1926 occurred a year later, when the total reached 29,957.

As a result, motorcycles made up 21% of vehicles on the roads in New Zealand in the early 1980s. The figure is closer to 7% today.

While it seems New Zealanders are not averse to swapping four wheels for two to beat "pain at the pumps", there is little sign of the Government recognising the economic imperatives at play, much less providing an economic incentive to do so.

On July 1, motorcycle registration and licensing increased as ACC levies rose. Licensing a 61cc (or less) moped now costs $255 per year, while petrol-powered motorcycles above 61cc cost $267 per year.

Licensing a car or utility with a gross weight of less than 3.5 tonnes is now $211 a year - significantly less than for the more economical two-wheeled transport.

The increase, ACC says, relates to the fact that motorcycles are dangerous. Ministry of Transport statistics show motorcyclists are 14 times more likely to be involved in a crash causing injury than car drivers.

In 2006, road crashes killed 38 riders or motorcycle passengers and injured 1017. Simply put, 7% of road users, (motorcyclists) accounted for 10% of the national road toll.

Transport Safety Minister Harry Duynhoven says the 28% increase in licensed motorcycles since 2001 has translated into an 80% increase in motorcycle casualties.

ACC Minister Maryan Street says some vehicles (like motorbikes) pay more because of the greater risk of being involved in a crash.

So, the ACC and Ministry of Transport equations seem straightforward at first glance - riding a two-wheeler is a costly business for the wider community.

But 2006 crash statistics reveal 38% of all motorcycle accidents were not caused by motorcyclists; 56% of motorcycle accidents in the same period involved machines over 500cc and only 8% for motorcycles under 125cc.

It raises interesting questions about precisely where the costs should lie and how they should be calculated.

While government initiatives such as the Ministry of Transport's "Getting There by Cycle/Foot" and "Fuel Saver" schemes are aimed at cutting carbon footprints, it seems that message is being blunted by government charges elsewhere.

When asked if the Ministry of Transport, in conjunction with other agencies such as ACC, would consider encouraging motorists to register and use less powerful vehicles by lowering licensing or registration costs for cars or motorcycles with a smaller engines, the answer was a qualified "no".

"While the Ministry has considered use of direct incentive schemes such as greater graduation of vehicle registration fees, other initiatives were being developed by Government as a means of reaching its goals," a spokesman replied, somewhat elliptically.

If car-buying trends are anything to go by, such a policy would be widely welcomed.

Recent Motor Industry Association (MIA) figures show New Zealand consumers are moving to lighter, smaller cars in their droves.

This year, sales of small cars are up by 26.6%, with average monthly sales of 1164. Mid-range vehicles - think Toyota Corolla or Ford Focus - are also up by 13%.

There is a corresponding drop in buyer demand for large cars such as the Honda Accord and Holden Commodore (down by 17.5%). National sales in the "upper large car" market, of models such as the BMW 7-series, decreased by 29.3%.

But these moves to micro-transport will not spare commuters any expense, beyond petrol costs.

Historical precedents for taxing the "guzzlers" are hardly few and far between. In the United Kingdom the "McKenna Duties" were introduced in 1915 when the Chancellor of the Exchequer began levying luxury imports to defray the cost of World War 1. The levy was intended as a temporary measure, but lasted until 1956.

In 1921 the so-called "horsepower tax", which was partly based on calculations of engine size, was introduced, and mass-produced cheap cars from the United States suffered.

So has the ministry got any policy in the pipeline anticipating further increases in fuel costs?

"The Ministry has not specifically considered a horsepower tax, therefore at this time we cannot comment on its feasibility. We are not aware of any jurisdiction currently taking this approach, although the volumetric capacity (cc rating) has been used as proxy for horsepower.

"However, reliance on power ratings and power to vehicle weight ratios have been used in schemes such as novice driver licence schemes, particularly in Australia. From a motorcycle licensing perspective this is also currently being considered in NZ."

Does the ministry have a long-term strategy for dealing with rising transport fuel costs?

"The Government is keen to develop a sustainable transport system and the Ministry is looking into gains that can be made in this area with respect to increased used of biofuel as well as other alternative fuels such as LPG and hydrogen.

"Prime Minister Helen Clark has already expressed her desire for New Zealand to be one of the first countries to widely deploy electric vehicles and we have a work programme designed around how this can be achieved.

"Issues around incentivising this type of vehicle, what sort of infrastructure will be required and safety elements are all being pursued. We are also developing a Vehicle Fuel Economy Standard, which will incentivise vehicle importers to bring in more fuel-efficient vehicles.

"Fuel economy will be converted into CO2 emissions and vehicles will have to meet or better a CO2 standard for a given year. The aim is to get the average CO2 emissions from the imported light vehicle fleet down to 170 grams of CO2 per kilometre by 2015."

The upshot seems to be that licensing a 60cc scooter will continue to cost more than licensing an eight-cyclinder family sedan.

 

Carless days

Carless days were introduced in New Zealand in 1979 to stabilise the economy.

Anyone who owned a petrol-powered vehicle weighing less than 2000kg - excluding motorcycles - designated a week day on which they would not operate the vehicle.

Other restrictions included the reduction of the open-road speed limit from 100kmh to 80kmh and limits on the operating hours of garages and service stations.

Exemption stickers were issued to those who had urgent business requiring the use of a vehicle on any day of the week.

Fines were given to those who didn't observe their designated carless day.

Two-car households had an obvious advantage and could continue driving seven days a week.

Those who lived in the country were exempt as it was presumed there was no public transport available for them.

The initiative folded after 12 months amid reports of black market exemption stickers and imitations.

 

Eke it out

Energy Efficiency and Conservation Authority (EECA) figures show the average car on New Zealand roads is more than 12-years-old and burns 10 litres of fuel for every 100km travelled. Newer cars can use about 50% less fuel over the same distance.

EECA is encouraging commuters to examine the necessity of many of the trips made in the good old family sedan; currently more than a third of all car journeys made in New Zealand are two kilometers or less.

 

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