This was a question my colleague and I were asked at a briefing session we were presenting at for an updated public transport network.
A network that considered the future of PT - particularly EVs - for the next decade(s).
This wasn't a UITP meeting. Or a UNDP briefing. It was in regional New Zealand - A region that has been named the second-best region in the world to visit by Lonely Planet!
The question while out of left field had merit...and we will get to the rationale shortly.
But first.
Did we know the price of diesel in a country that was once incorporated into the Soviet Union and is famous for being The Land of Fire (courtesy of a burning mountain that has been on fire for around 65 years)?
Absolutely not!
In fact, we realized we knew very little about fuel prices in the region, or the country in general for that matter.
We had been to Azerbaijan a decade ago. For a weekend trip when living in Qatar. But there is only so much you can learn on a 36 hour whirl wind adventure.
Here is what we did know about the country:
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Oil: The country produces oil. In fact, Baku's oil fields were used for filming the James Bond film 'The World is Not Enough'. Pierce Brosnan is still one of of my favourite Bond actors, and stared in four of the films...technology did let him down a bit:) And, yes we are a massive Bond movie fan, and you will see many references throughout our writings and musings!
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Jams: Never really been much of a jam connoisseur, but the range and quality of the jams was exceptional. In fact there is even a Sweetness Festival that celebrates these wonderful spreads (I remember comparing jams with an executive at Public Transport Victoria who had recently undertake a PT trip there!)
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Beer: For a country that is both Muslim and Secular, beer was surprisingly well priced, high quality and available - favoured the Beerbasa Special (which is a Red Ale/International Amber Ale). Only a few dollars a bottle.
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Modern: While there were many historic areas and buildings, the city of Baku was quite modern with many new buildings, and a surprisingly good PT network with a modern fleet - internet also wasn't too bad.
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Burning mountain: Yes it has one of those - https://en.wikipedia.org/wiki/Yanar_Dagh
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Costs of living and fuel prices: Cheap - food was well priced as was fuel, including diesel.
Which brings us back round to the original question.
The price of diesel in Azerbaijan and how does that relate to New Zealand
The question was being asked by a senior official to prove a point...or at least test the water.
"Is the high price of diesel in New Zealand impacting the feasibility of traditional buses, and are there scenarios where having some diesel vehicles in a fleet still makes sense"
It is a complex question. And a question that can lead itself to multiple answers.
To start. Yes Azerbaijan has cheap fuel including diesel. In fact, it ranks as the 15th cheapest country for diesel in the world.
Current prices are just north of 50 US cents a litre.
New Zealand is around double the price - coming in at around $1,10 USD - although not accounting for road user chargers. The average price in the world as of January 2025 is 1.17 USD.
The image below from globalpetrolprices.com provides further details - how cheap is Venezuela?!
Interestingly the price of diesel has been increased recently in Azerbaijan.
Price is set by the Tariff Council and is up almost 25%. The Council has made amendments based on bilateral relations with, and providing fuel, to the EU. As well as working towards meeting requirements to cut GHG emissions by 35% by 2030 under the Paris Agreement.
In short, fuel prices are set to continue to increase.
But...do low diesel prices equate directly to increase use of diesel vehicles?
Not necessarily. In fact, in 2024, Azerbaijan commenced a process to buy 3000 electric buses. This has started with a deal with BYD to buy 160 electric buses and 100 chargers. The first buses are now operational, and were so before Baku hosted the 29th UN Climate Change Conference.
So its clear, even with low (albeit increasing) diesel prices in the country, electric buses are being considered and implemented.
Are higher diesel prices impacting electric bus implementation in New Zealand?
Another difficult question. There are currently around 2600 public transport buses in operation in New Zealand - 40 of these are electric.
However, the Ministry of Transport (MoT) has ambitious plans to decarbonize the country's public transport fleet by 2035. When we compare this to other Jurisdictions, many focus on a 20 percent diesel / 80 percent electric vehicle split - which at this point in time has some merit.
Looking at the data for New Zealand, and the NZTA Research Report 710 Zero emission bus economics study (well worth a read if you have time) https://www.nzta.govt.nz/resources/research/reports/718/ the evidence is quite profound.
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Electric buses are the lowest cost option for replacing existing diesel buses. This is based on fuel sand maintenance saving.
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One of the clear findings that stand out is as follows: The Emissions saved by retiring diesel buses early far outweigh the emission generated by constructing replacement Zero Emission Buses (ZEB).
However, it is also recognized that ZEBs, batteries and charging stations in particular, are costly, have shorter life spans - some charging stations are seven to 10 years - and add to the overall costs.
However...there are huge advances in technology, both in batteries and in charging, that is set to turn the efficiency and operational capacity of electric buses on its head (more about this in another article as this technology will be a game changer).
So...what is the best way to respond to higher ZEB and infrastructure costs, and higher diesel costs so that New Zealand can boldly move towards a fully electric (or alternative fuel) fleet in the future?
In my humble opinion Dynamic Transport Policy is key. Specifically, transport goals or policy that consider:
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Yearly investigations into technology, buses, lifespans of the technology, costs and what is available to the market
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Changing/rolling percentage of ZEBs that change based on five year periods, with the overall goal of 100% ZEBs still staying the same - but time periods changing if needed
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Production times and whole of life environmental impacts, C02 and costs.
This is an approach that has been adopted - with some success - in several jurisdictions around the world, and New Zealand is well placed to adopt with a similar level of success.
Summary/Conclusions
Electric vehicle technology is changing quickly. Oil and diesel fuel prices are constantly changing and complex.
Interfering with diesel prices is also difficult. Refinery costs, purchase of crude oil, profits, distributions marketing, retail station costs, the weaker NZ dollar all play a role...also politically lowering price may be in direct conflict with other policies.
As such, having an overall goal of 100% ZEBs, but having a dynamic plan that changes based on technology advances and diesel prices, provides the highest chance of success, and the most value for money, all while providing the best value to the New Zealand public.
And as the above, all relates to value and minimizing costs, let finish with a famous James Bond line from the legendary Pierce Brosnan himself:
'I see you put your money where your mouth is!' From the 1999 Bond film The World Is Not Enough.
Till next time.
Andrew
Transit Trends · Andrew Collings, KA Advisory. Read and comment on the original on LinkedIn.
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