Petrol prices drop before October tax increase

Petrol prices drop before October tax increase

The price of petrol fell a total of two cents per litre during August, dropping from $1.76 per litre to $1.74 per litre for 91 octane in the main centres. It initially rose two cents in early August to $1.78, before falling four cents during the month.

“The price reduction follows a 15 percent fall in crude oil costs since early August, with a barrel of oil dropping from around US$83 to US$71 although it has since begun climbing again, says AA PetrolWatch spokesperson Mark Stockdale.

“While this seems like quite a big reduction, the cost of refined fuel only fell about 10 percent, and the savings for motorists have been further offset by a 3 cent loss in the value of the kiwi dollar during the same period. When commodity prices rose 6 percent in early August, this only equated to an extra 2 cents at the pump because the exchange rate also climbed several cents,” he says.

The price of diesel remains unchanged since early July on $1.19 per litre, despite increases in imported costs during July and subsequent reductions in August.

“Lately diesel pump prices seem to have been immune to small fluctuations in import costs and the exchange rate. For some of the time that means the margin between import costs and retail prices has been above average and motorists haven’t been able to benefit from lower diesel prices,” Mr Stockdale says.

AA PetrolWatch advises that fuel prices are scheduled to rise on 1 October. “Excise on petrol will be rising 3 cents per litre, and the GST increase will add about 4 cents more to the price of petrol, and 3 cents to diesel,” says Mr Stockdale.

“Based on today’s prices, that means a litre of 91 octane will rise to $1.81, and diesel will cost about $1.22 a litre.”

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

ENDS

© Scoop Media