Record run of stable prices

Media Release: 5 May 2009

PetrolWatch – April 2009

Record run of stable prices

Fuel prices remained unchanged throughout April, except on the last day of the month when petrol prices fell by up to five cents. Until then, prices had not moved since mid-March, when petrol fell to $1.59 per litre and diesel 99 cents per litre.

AA Senior Policy Analyst Mark Stockdale says “it’s the longest run of stable prices in nearly two years. While international fuel prices have fluctuated in the six weeks since the last retail price change, movements in the value of the New Zealand dollar have been offsetting those adjustments, giving motorists an unusually long reprieve from pump price variations.”

“An exception to that has been Rotorua, which saw some price cutting during April, with pump prices up to eight cents lower than the national average at times, which is a remarkable discount.”

“It’s good to see some local price competition. While not common, local price competition does happen occasionally, such as in Tauranga and New Plymouth, where prices have recently been a few cents lower than average.”

“People often believe there is no competition in the New Zealand fuel market because the four major oil companies all charge the same price. However, the lower prices we saw in April show the market is working competitively as none of the oil companies can risk charging more than the other.”

The latest nationwide fuel price reduction is due to falls in the international cost of refined petrol, and brings the price of a litre of 91-octane down to $1.54 per litre, and $1.60 for 95-octane in the main centres. Diesel is unchanged on 99 cents per litre.

AA PetrolWatch notes that the price premium between 91 and 95 octane petrol has now increased from five to six cents per litre.

“This may be a sign of the times as the gap between the cost of the petrol grades on the international market has been steadily increasing in the last few months,” says Mr Stockdale.

ENDS

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