Petrol price's downward trip could be over
A fourth straight decline in petrol prices is undoubtedly good news for motorists, but experts say the downward streak has most likely run its course.
Most major fuel retailers yesterday trimmed fuel prices by 2 cents, with a litre of 91 octane now selling at 209.9c, 95 octane at 217.9c, and diesel at 146.9c across most major service stations.
BP spokesman Jonty Mills said an ongoing decline in the price of refined petroleum products and a spike in the New Zealand dollar had enabled oil companies to pass on more cost savings to customers.
Prices have now slid 11c since the near-record highs reached in February. In that period the New Zealand dollar has gained 2.7 per cent to recently trade at US86.36c, a level it has only reached once before since floating in 1985.
Meanwhile Brent Crude prices - one of the main cost components in refined petroleum products - have dropped almost 12 per cent over the same period to recently trade at US$104.37 a barrel.
But commodity and currency experts say consumers are unlikely to get too much more relief at the pump.
ANZ's senior FX manager, Sam Tuck, said the surge in the kiwi could largely be laid at the feet of the Bank of Japan and its recent decision to pump US$1.4 trillion into its economy.
The move had weakened the yen and increased the appeal of the kiwi in the eyes of yield-hungry investors, but the "portfolio shock" should be absorbed in the next two weeks, when the New Zealand currency was expected to resume trading at more normal levels.
"We expect the kiwi to trade a little higher, but not significantly higher, than the average for 2012," Tuck said, "ANZ has it at US84c flat all year."
BNZ's director of institutional commodity sales, Paul White, said oil prices look likely to run their downward course.
"What we are seeing is a divergence of the kiwi and the Brent price and historically those divergences are very short-lived," he said.
The weaker global growth outlook suggested prices were likely to flatten out around the current level.