The boss of New Zealand's largest vehicle company wants Kiwis to pay more for their petrol.

The boss of New Zealand's largest vehicle company wants Kiwis to pay more for their petrol.

Toyota New Zealand CEO Alistair Davis says our fuel prices are far too low - the fourth-lowest in the OECD in fact.

That's encouraging us not only to own bigger cars, but to drive them longer distances. And that means we're in reverse when it comes to meeting international greenhouse gas emission obligations.

"Our greenhouse gas emissions have actually gone up 23 per cent since 1990," he told a media briefing in Auckland last week.

"Our population has risen 26 per cent in that time, but our light vehicle fleet has gone up 53 per cent.

"Not only that, but the average engine capacity has gone up 10 per cent since 2000, and average distance travelled per light vehicle has gone up 64 per cent since 1990."

The single most effective way to deal to this issue would be to raise petrol prices via introduction of a carbon tax, he said.

"That'd permanently shift us to a better emissions rate overall, because it would encourage us to shift to smaller cars," Mr Davis said.

Information displayed at last week's briefing showed that only United States, Mexico and Canada have lower fuel prices.

When converted to New Zealand dollars, the prices in the US and Mexico are $1 a litre, while the most expensive countries are Belgium, Netherlands, Norway and Turkey where prices are as high as $3.10 a litre.

Mr Davis isn't saying what the price for our petrol should be because that isn't the point of the debate.

"But there obviously is a tipping point. For example, when the price of 91 octane petrol went past $2 a litre, it kick-started a trend that saw many motorists downsizing their vehicles," he said in an interview with the Taranaki Daily News.

"So maybe $2 is the psychological barrier." Mr Davis said the issue is not just a climate change issue, but more about the sustainability of personal motoring.

The world is using up fossil fuels faster than the planet can replenish, and as China gets richer the pressure is getting worse, he said.

This gap between oil supply and demand needed to be covered via various alternative energies and technologies. But in New Zealand, a big fleet size relative to population, and low new car sales volumes, means it will take 15 or more years to effect change in the overall vehicle fleet.

"So the easiest solution is to address the petrol price," said Mr Davis.

"This would start incentivising motorists towards more sustainable solutions before it turns into a crisis."

The revenue could go towards tax cuts or even public transport, he added.

Mr Davis criticised both the previous and current Governments for their "anaemic" attitude towards getting New Zealand's carbon footprint down, saying that the Government could and should do more.