Stable end to year but petrol price rise looms

PetrolWatch – December 2011

Stable end to year but petrol price rise looms

Petrol prices did not move through December but this appears set to change as international tensions around Iran impact on commodity prices.

The price of 91 octane petrol in the main centres ended the month at $2.07 per litre, 95 octane at $2.15 and diesel at $1.58 – all unchanged from the start of December.

However, towards the end of the month the margin importers make on petrol began to fall, and a price rise appeared imminent.

Tensions between Iran and the United States and European Union (EU) over Iran’s nuclear programme have raised the threat of one of the world’s most important shipping lanes, the Strait of Hormuz, being closed and EU sanctions against Iran. The situation has led to a spike in global commodity prices, meaning our fuel retailers are paying more for their petrol.

“While none of us like to see prices going up, the current international tensions are set to increase what Kiwi motorists pay at the pump for petrol,” says AA Motoring Affairs General Manager Mike Noon.

“It is pleasing that the oil companies absorbed their higher costs and held off raising the prices through the peak holiday driving period but an increase looks inevitable.”

On the flip-side, the importer margin for diesel remains well above the normal range and the price at the pump should come down from its current level.

“The margin on diesel was high for all of December and the AA once again calls on fuel companies to drop the price of diesel by 5 cents per litre,” says Mr Noon.

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