by Hamish McBrearty

Created on: June 24, 2008   Last Updated: June 13, 2009

As oil and petrol hit all time highs seemingly weekly, many New Zealanders are turning to alternative forms of transport to curb their fuel bill.

New Zealand is an island nation with limited refining capabilities, meaning we must import much of our fuel, which leaves the country at the mercy of international price fluctuations. Combine that with high government taxes and levies, and it's recipe for financial pain.

However, once fuel topped the $2 per litre barrier, many New Zealanders began to re-evaluate their fuel usage. No longer do people drive the car down the road to the shops, choosing to walk, or plan the most efficient route to do all their errands in one trip. Some who live in outer suburbs of cities have even begun to car pool.

Travelling from Auckland's city centre to the airport, a journey which would normally take a couple of hours on a gridlocked motorway, can now be done in 40 minutes as high petrol prices have eased congestion.

Others have taken more radical actions, leaving their car at home and braving the cold New Zealand winter on bicycles. While evidence for the number of people doing this is still anecdotal, many are noticing far more cyclists on the road. Many of the cyclists note that, in addition to saving money on fuel, they are also saving money on gym subscriptions as their daily commute doubles as a workout.

With a population of just 4 million, smaller than many cities, New Zealand does not have a well developed public transport system, relying largely on buses rather than rail or ferries. Despite these shortcomings, the number of people riding the bus to work has spiked to levels not seen before, requiring some cities to add additional capacity.

But it's not just the cost of private transportation that is causing concern for New Zealanders, as we almost import a great deal of food and goods, these prices have also been pushed up by rising oil prices. This has lead to a rise in the use of farmers' markets, as well as an increasing trade in goods which have been produced within 100km of where they are sold.

As an island nation, holidays usually involve air travel, generally to Australia, but with the airlines putting their prices up as their fuel costs sky rocket, many are now forgoing an international holiday and choosing to spend their vacation time at one of the many attractions in their own country.

The New Zealand Government has also come under fire as citizens and businesses feel the pinch, but so far they are refusing to lower fuel taxes. New Zealand has a Goods and Services Tax (GST) which is 12.5 percent, and this applies to petrol. But as the price of petrol has gone up, the Government's GST take has also increased and lobbyists are attempting the make petrol and diesel exempt from GST.

Unfortunately for many New Zealanders, the only thing that they can do about rising oil prices is grin and bear it. Being sparsely populated means that the distances some travel make it impractical for them to car pool or ride a bike, and public transport is somewhat limited. For this group of people the only relief can be a drop in the price of oil, something which could be some way off.

While larger nations may believe they are struggling with the soaring price of oil, it is the smaller and more remote nations which feel the pinch first. While New Zealand's price for petrol is a lower than some European nations, it is the additional cost of transportation which drives inflation up and causes the New Zealand economy to slow.

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