The Prime Minister was this morning forced to admit there is no New Zealand law preventing fuel companies from passing on the 11.5c Auckland fuel tax to motorists in the rest of the country.
Jacinda Ardern was asked on TVNZ 1's Breakfast about the possibility fuel companies were going increase the price of petrol in the South Island and elsewhere to offset the 11.5 cents per litre consumers had to pay in Auckland.
All she could offer in reassurance was proposed market studies to monitor the legality of fuel providers' consumer practices, and the fact nothing is stopping companies from raising fuel prices randomly now.
"Companies actually have it within their own rights to set those prices themselves - usually though based on exchange rate, operational costs, the price of crude oil, those are all justifiable," Ms Ardern said.
Ken Shirley of the Road Transport Forum says New Zealand's petrol market is highly competitive and commercially unattractive for oil companies.
"What I can tell the people in Southland is if their fuel company does that, there is no requirement on them to do it, they would only be doing it by law, they would simply actually be increasing the price of fuel, that's what they would be doing.
"So do we have a law that says that we cannot allow fuel companies to arbitrarily increase the price of fuel - no we don't.
"But that's of course one of the reasons we want to do these market studies is to check people are being treated fairly in the way some of our fuel providers are operating."
The Prime Minister said fuel taxes were not unprecedented in New Zealand in the past, and that her government will not be collecting excise outside of Auckland for a regional fuel tax.
"We've isolated to Auckland. If a fuel company increases the price in another part of the country they cannot say that's been because of that regional fuel tax, because that would be a lie," she said.
From July 1 motorists in the city will be shelling out 11.5 cents more per litre for petrol.
Yesterday, Auckland Council voted, 15-2, to implement an 11.5 cent per litre fuel regional fuel tax (RFT) on Auckland petrol users, starting this July.
Prior to today's council meeting, the levy was expected to raise fuel by 10 cents per litre, and comes in addition to the government's national-wide fuel excise increase.
In his first economic speech, National Party leader Simon Bridges said the RFT was an unnecessary tax and would cost an average Auckland family around $700 a year.
The tax can be implemented for no longer than 10 years.
Mr Bridges also added that the government and Auckland Council should not need the RFT to raise funds for transport projects.
In the latest 1 NEWS Colmar Brunton poll, Auckland's regional fuel tax received a slim majority support from the city's residents.
The new National Party leader says the tax is not needed and will cost Auckland families $700 a year.
The poll of just under 4000 people showed 52 per cent of people supported the tax with 43 per cent opposed.
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