Resources

The impacts of petrol price changes on petrol consumption, traffic volume and public transport patronage in New Zealand are discussed. Based on this evidence and that from Australia and other countries, a set of ‘best estimate’ petrol price elasticities for the New Zealand context, of –0.15 for the short run and of –0.20 for the medium run, are recommended.

Transport fuel prices in New Zealand (as in other countries) have varied quite dramatically over the last five years. Knowledge of the likely market responses to fuel price changes is important for transport forecasting applications, such as those for:

• government taxation revenues
• fuel import demands, and consequent impacts of fuel imports on related macroeconomic variables
• transport demand and its associated energy demand
• transport emissions, including the impact of climate change policies
• traffic growth trends, for use in road investment planning and evaluation
• public transport planning, particularly in regard to future peak demand levels and hence rolling stock requirements.

Applications and implications of the impacts of petrol price changes on modelling, policy making and further research are made.

Keywords: Australia, bus services, carless days, diesel, econometric, elasticity, fuel, GDP per capita, international fuel consumption, modelling, New Zealand, petrol, price, public transport, rail services, roads, traffic, traffic analysis, traffic modelling