PetrolWatch – May 2010

Media Release: 1 June 2010

PetrolWatch – May 2010

Lower crude oil prices flow through to the pump
A large drop in the price of crude oil helped with a fall in petrol and diesel prices during May, although the reductions were partly offset by the declining value of the New Zealand dollar.

Petrol prices fell nine cents per litre during the month, dropping from $1.82 to $1.73 in most centres. Diesel prices only dropped five cents per litre to about $1.16, depending on the location.

“Crude oil prices fell over US$20 a barrel during May, to under US$67. That is the lowest price it’s been all year, and led to a 20 per cent reduction in the commodity price for petrol and a 15 per cent drop in diesel. Unfortunately the six cent fall in the Kiwi dollar in the same period offset half those reductions to 10 per cent and 7 per cent respectively,” says AA PetrolWatch spokesperson Mark Stockdale.

“With 40 per cent of the petrol pump price relating to import costs, the 10 per cent commodity price reduction only equates to a four per cent reduction at the pump – or about the nine cent drop we saw in May.”

“With no excise tax, diesel prices, which have been above average for some time, should have fallen by a similar amount. It hasn’t and the AA is therefore calling on oil companies to drop their diesel prices,” says Mr Stockdale.

AA PetrolWatch notes there has also been some variation in diesel prices at main centres around the country, with some parts of the lower North Island and South Island a cent or two higher than sites further North. This appears to be the result of a new policy by some oil companies to reflect the additional costs of shipping fuel south. It is unclear if a similar policy will be adopted for petrol prices.

For more information, go to: www.aa.co.nz/aapetrolwatch

ENDS

© Scoop Media