PetrolWatch April 2012: Pump prices should be falling

2 May 2012

PetrolWatch April 2012: Pump prices should be falling

The AA says fuel prices should be about 4 cents per litre lower at the pump.

The imported cost of diesel and petrol fell 3-4 cents per litre since the last price rise on 14 March, yet pump prices remained unchanged during April, with diesel on $1.57 a litre and 91 octane petrol at $2.20 a litre in the main centres.

“While oil prices have dropped eight per cent in the last month or so, the international commodity price for refined petrol or diesel – the stuff we actually put in our tanks – has only fallen about four per cent. Even so, with a stable exchange rate imported costs are down and motorists should have seen a drop in the pump price by now,” says AA PetrolWatch spokesperson Mark Stockdale

“The AA’s monitoring of fuel company importer margins – the difference between retail prices and costs – shows they are above the level at which we would normally see a drop in retail prices, and we calculate prices should be about 4 cents per litre lower at the pump,” Mr Stockdale added.

Why are fuel prices lower in Australia?

Kiwis travelling across the Tasman often ask why fuel prices are so much lower in Australia. AA PetrolWatch explains the reason is due to the difference in fuel taxes and exchange rates between the two countries.

“In NZ we pay 59 cents per litre in fuel excise, plus another 1 cent per litre for the Emissions Trading Scheme, with 15% GST on top. By comparison, Australians pay 38 cents per litre in excise and only 10% GST. Then there is the difference in the exchange rate, with the NZ dollar currently worth about A$0.79 compared to US$0.82,” explains AA PetrolWatch spokesperson Mark Stockdale.

Taking these into account, AA PetrolWatch calculates the current average Melbourne price of A$1.51 a litre for 91 petrol converts to $2.14 a litre in NZ, as shown below:
• A$1.51 less Australian tax (excise & GST) = A$1.00
• convert to NZ$ = $1.26
• add NZ excise and ETS = $1.86
• add GST = $2.14 per litre

“Allowing for the difference in taxes and exchange rates, the AA’s calculation shows that, despite appearances, the prices in Australia are comparable with those in NZ,” Mr Stockdale said.

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

ENDS

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