Petrol goes up except in Christchurch

HAMISH RUTHERFORD
Last updated 12:37 15/06/2011

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Caltex and Z Energy raised the prices of all grades of fuel by 3 cents a litre last night, claiming rising oil prices had more than offset the strength of the currency. Regular unleaded petrol now costs $2.089 a litre, and diesel $1.509 at most stations.

BP later followed with a smaller increase, raising the price of petrol by 2 cents to $2.079 and $2.159 for 91 and 95 respectively, although it has also raised the price of diesel by 3 cents a litre.

All three companies have said they are holding prices in Chirstchurch at the old level for the time being. Following the February earthquake, when prices were rising strongly, petrol prices in Christchurch were held for several weeks.

Independent petrol company Gull plans to hold its petrol prices as long as possible, saying raising the prices would be a "kick in the teeth" for Kiwis.

Petrol at unmanned Gull sites was under $2 per litre, and $2.039 per litre at most sites.

The company said it would freeze prices for at least the weekend, and would review it on Friday.

The Automobile Association said drivers would be left confused by the price hikes, as the New Zealand dollar soared to record levels, challenging fuel companies to explain the move.

"While commodity prices had been rising as the US dollar dropped, based on our analysis, we don't believe the fuel companies had to raise their prices at this stage," AA spokesman Mark Stockdale said.

Last week, the New Zealand dollar briefly hit US83c, the highest level against the United States dollar since the kiwi was floated in 1985.

The rise is driven by hopes of a strong economic recovery in 2012 and speculative buying.

Although the currency dropped sharply after the latest series of earthquakes in Christchurch, it quickly recovered and was trading at US81.8c last night.

A strong dollar hurts exporters by making goods more expensive overseas, but it makes imported good cheaper.

Last week, Prime Minister John Key said the strong dollar was "not all bad news", because it would mean consumers would pay less than otherwise for goods such as fuel.

A spokesman for Z Energy said that since the most recent price cut the cost of crude oil had risen by US$8 a barrel, while the New Zealand dollar was up just US1c.

BP said in a statement: "Although the New Zealand dollar has been strong recently, this has not offset the rising cost of refined fuel. Since 3 June, the cost of refined petrol increased by 2.6 cpl."

After hitting a record $2.219 a litre in April, the price of regular petrol fell four times in 16 days last month.

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- BusinessDay.co.nz

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