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Executive Summary

This report considers how central government, regional councils, and local authorities
may respond to the transport challenges associated with rising oil prices.  This research
supports the environmental sustainability and economic development objectives of the
updated New Zealand Transport Strategy (MOT, 2008b), as well as the specific targets in
the recently released Government Policy Statement on transport (New Zealand
Government, 2008).

Oil currently plays an important role in the transport system in three primary ways. 
Firstly, and most obviously, oil provides the fuel that powers the majority of vehicles. 
Secondly, oil is the major input into the asphalt and bitumen used to construct and
maintain road surfaces.  Finally, the majority of public transport (PT) services are
dependent on diesel – although to a lesser extent than private vehicles.

Thus, when oil prices rise and consumers are faced with higher prices for petrol and
diesel, government agencies are confronted with higher costs for maintaining and
constructing road infrastructure as well as higher costs for operating public transport
services.  The price of oil is therefore a key driver of the cost of using, maintaining,
constructing, and operating the transport network.  

This report aims to help government agencies understand the risks posed by high oil
prices and, ultimately, recommend changes so that the transport system develops in a
way that is less dependent on oil based transport fuels.  The results of this research are
summarised into four key sections, namely: modelling prices for transport fuels,
modelling future travel demands, recommended responses to rising oil prices, and
potential impacts of the responses.