The cost of living is increasing. So what's behind it?

The cost of living debate has made its way to Parliament as politicians argue about who is to blame for life in New Zealand becoming more expensive.

In light of petrol prices hitting a record high of $2.40 on Tuesday, Stuff published a story pointing out that it's not just fuel prices that are increasing.

Living costs are rising across the board, particularly when it comes to necessary day-to-day expenses - fuel, food, electricity, insurance, rates.

The Opposition used it as ammunition during question time in the House on Wednesday, claiming the Government was to blame for our rising cost of living.

READ MORE: Rising fuel prices are not the only thing making life in New Zealand more expensive

National Party leader Simon Bridges said fuel, rent, insurance, rates, electricity, cigarettes and food were all more expensive as a direct result of Government policy.

IAIN MCGREGOR/STUFF Kiwis are being left with less change left over at the end of the week as living costs rise.

Government policy has undoubtedly impacted prices for some of these goods and services. But some price hikes have been the result of decisions made during the nine years National was in government.

So how do our prices compare with those in other countries?

Cost of living website Expatistan ranks New Zealand as the 16th most expensive country to live, while cost-of-living index Numbeo ranks New Zealand as 17th most expensive.

Numbeo says the cost of living in New Zealand is 2.79 per cent higher than in United States.

What's really behind rising living costs?

Let's break it down, starting with food:

Much of our food is imported, and a weakening New Zealand dollar means some of those goods cost more to buy. Stats NZ said grocery food prices rose 0.5 per cent in August, influenced by higher prices for snack foods, butter, and eggs.

However, fruit and vegetable prices, which rose strongly last year due to wet weather, fell 2.1 per cent in August, influenced by lower prices for lettuce, broccoli, and cucumber.

Seasonality and weather events often play a big role in affecting produce prices and out-of-season fruit and vegetables drive up food prices ($16 for a punnet of blueberries anyone?).

Another factor affecting the price of food is GST, which is added to everything sold in New Zealand.

In 2010 the National Government raised GST from 12.5 per cent to 15 per cent, to pay for income tax cuts.

NZ First campaigned in last year's general election for GST to be removed from "basic food items" but Labour has no changes to GST in its sights.

STUFF Butter prices have risen 27 per cent so far this year, ASB says.

Fuel:

The price of petrol is perhaps the living cost the public is most conscious of. Everyday we drive past petrol stations advertising fuel prices in big bold numbers, making us hyper sensitive to even the slightest movement in this vital commodity.

When National came into power in 2008 the price of 91 was around $1.70 a litre. Under National, petrol prices bounced around, peaking at about $2.30 in 2013 - a far cry from the $2.40 highs of today.

During much of that time global oil prices were bottoming out, meaning New Zealand motorists were getting off relatively lightly at the pump.

Since the new coalition government came in at the end of last year petrol prices have soared, in part because of a regional fuel tax imposed in Auckland and an upcoming national excise tax on petrol coming in next month.

A falling New Zealand dollar and the rising international cost of oil also played a part.

And on Thursday we found out that ACC was planning to increase its levy on petrol by 1.9 cents a litre and raise the average annual levy on car registrations from $113.94 to $127.68 a year.

Rent:

Landlords have warned that the Government's rental reforms will result in higher rent being charged as property investors pass added compliance costs on to tenants.

Policies such as the Healthy Homes Guarantees Act, which sets more strict standards for rental properties, the extension of the Bright Line Test for residential property, and the expected "loss ring fencing" for landlords would drive up rents officials told the Housing Minister Phil Twyford.

TradeMe reported that rent in New Zealand hit a record high in August, with the country's median weekly rent for the month up 6.7 per cent on a year ago.

But rent has been rising faster than inflation since 2010, NZ Property Investors Federation said earlier this year.

This could largely be attributed to a simple supply and demand issue. New Zealand has been in the midst of a housing crisis for the past four years, essentially allowing landlords to hike up rents, knowing that desperate renters would be prepared to pay top dollar to secure a place to live.

National also introduced legislation requiring rental properties to meet set standards for insulation and heating. The push to improve our rental stock meant some landlords were required to spend thousands improving their rentals. Investors warned at the time the move would drive up rents.

GEORGE HEARD/STUFF Petrol prices have hit an all time high of $2.409.

Insurance:

While insurance is not an absolutely necessary living cost, it does provide an important safety net for many New Zealanders wanting to protect their health and assets.

But the peace of mind that comes with insurance is becoming a luxury only the rich can afford, largely thanks to our disaster-prone country.

Home insurance premiums rose 17.9 per cent in the last year alone.

Stats NZ said it was a level of increase that had not been recorded since 2014.

Year-on-year increases skyrocketed in response to the Canterbury earthquakes as insurers hiked premiums based on the level of natural disaster risk homes were exposed to.

In February Stats NZ said price increases for petrol, rent, and insurance hit low-spending households the hardest, with inflation for that group up 2.4 per cent for the year.

DAVID WHITE/STUFF Developments like Hobsonville Point in Auckland have gone some way in addressing Auckland's housing shortage. But finding a rental in Auckland is still a struggle for tenants.

Electricity:

New Zealanders have faced shocking increases in the price of power over the past 30 years.

A government review into the price of electricity revealed that customers faced significant increases in power costs since 1990, with residential prices rising 79 per cent when adjusted for inflation. Meanwhile commercial prices had dropped 24 per cent.

"Since 2000, New Zealand's residential prices have risen faster than most other OECD countries," the report said.

The review noted that while the industry did not seem to be making excessive profits, it could have a more effective wholesale contract market and could be more efficient in the way its lines companies operated.

Energy and Resources Minister Megan Wood said a second phase of the review would recommend solutions to issues identified.

IAIN MCGREGOR/STUFF Damage to homes in the Christchurch earthquakes resulted in insurance companies hiking premiums

Smokes:

Price rises for cigarettes and tobacco had the largest impact on inflation for most household groups in the March 2018 quarter, Stats NZ said.

This was due to an annual tobacco tax increase that was implemented at the start of 2018, bringing the average price for a packet of 25 cigarettes up to $35.14.

Since 2011, excise tax on both cigarettes and roll-your-own tobacco has risen 10 per cent on January 1 every year, through to 2020.

As a result tobacco prices have more than doubled over the past seven years.

The tax increases were part of the National Government's drive for New Zealand to be smokefree by 2025.

KIRK HARGREAVES/STUFF If electricity providers used lines companies more efficiently our power prices could be reduced, a government report said.

Rates:

Regardless of whether you're a home owner or renter, we all pay rates.

Renters may not feel like they're not paying rates but you better believe that your landlord has certainly factored that into your weekly rent.

Rates are set by local governments, and pay for things like rubbish collection, public transport and community facilities.

A July analysis by Stuff found that over the coming decade ratepayer bills in five main cities will, on average, increase by 50 per cent.

Hamilton and Christchurch ratepayers will pay about 53 per cent more by 2028, and those in Wellington by 48 per cent.

Auckland rates will rise 38 per cent, and Dunedin by 59 per cent.

Rate increases for 2018 outstripped inflation with increases of 2.5 per cent in Auckland to 5.5 per cent in Christchurch and 9.7 per cent in Hamilton.

The Taxpayers Union also crunched the numbers and found that during the past three years, rates charged by local authorities have risen by an average of 12.8 per cent.

At the start of the year increasing prices for home insurance and local authority rates had driven up superannuitants inflation by 2.1 per cent for the year, Stats NZ said.

ROBERT CHARLES/STUFF Tobacco prices have doubled in the past seven years.