Petrol prices drop across NZ as Government questions fuel companies

Fuel prices at the Victoria Street Z Station in Wellington on Tuesday morning.
Jericho Rock-Archer/Stuff
Fuel prices at the Victoria Street Z Station in Wellington on Tuesday morning.

Fuel prices are dropping across the country after the Government questioned fuel companies’ profit margins.

In Auckland, the price of 91 octane petrol was between $2.88 and $3.05 a litre across stations on Tuesday morning, while diesel was between $2.79 and $2.97, according to PriceWatch.

Prices had dropped below $3 in Wellington and Christchurch.

AA principal policy adviser Terry Collins said the decline was down to two things: the drop in price of crude oil and refinery, but also the questioning of why fuel companies had high profit margins by the Government.

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Crude oil prices plunged more than 7% last Tuesday as prices fell below US$100 (NZ$162) a barrel.

“It was a combination of the cheaper crude and cheaper refinery, and it’s resulted in quite significant decrease in landed price,” Collins said.

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But that landed price had been taken as margins by the oil companies and on Monday Energy Minister Megan Woods yet again had spoken to fuel company chief executives, asking why its margins were so high.

“And they’ve responded by dropping prices,” Collins said.

The Ministry of Business, Innovation and Employment monitors weekly fuel prices and margins, and in the week ending July 8 it showed petrol margins were up from 22c to 45c a litre.

Diesel margins were up from 30c to 64c a litre.

The drops came after the June quarter Consumers Price Index was release by Stats NZ, which found petrol prices had risen 32% over the previous 12 months.

It was the biggest annual increase since 1985 but still managed to be dwarfed by the 74% rise in diesel prices over the year.

Over a period of just three months the average price of 91 octane petrol rose from $2.67 to $2.84 a litre, while the average price of diesel jumped from $1.98 a litre to $2.57, Stats NZ said.

A year earlier, the average price of 91 octane petrol was $2.13 a litre, and diesel was $1.40 a litre.

On Sunday Finance Minister Grant Robertson announced the 25 cent fuel excise cut, half-price public transport fares and the Road User Charges cut would continue until January 31, 2023.

The initial cut was brought in to reduce cost of living pressures on households, in March 2022.