Pump prices fall at last

Media Release: 8 June 2012

PetrolWatch – May 2012

Pump prices fall at last

After sustained reductions in commodity prices, petrol prices fell 4 cents per litre in May, ending the month on $2.16 per litre for 91 octane, with diesel down 3 cents to $1.54 per litre in the main centres. Pump prices subsequently fell 7 cents per litre in the first week of June.

“The reduction in pump prices mostly matches the fall in refined commodity prices over the last two months. Eleven cents per litre might not seem a lot when oil prices had fallen 22% at the end of May, but pump prices are linked to the commodity price for refined fuels, not crude oil,” says AA PetrolWatch spokesperson Mark Stockdale

“People monitoring oil prices need to know that petrol commodity prices move independently of oil or other energy prices,” says Mr Stockdale.

“In this case, a 22% drop in oil prices effectively translated to a 4% drop in retail prices. That’s because refined fuel commodity prices only fell 8% in the same period when converted to NZ dollars. Allowing for the fact that nearly half the retail price is tax, we would expect retail prices to drop by about half that amount.

“The AA’s monitoring of commodity prices and exchange rates shows that by the end of May the imported cost of fuel had fallen about 11 cents per litre since retail prices last increased in March, but since the imported cost continues to fall we hope there will be further price cuts,” Mr Stockdale added.

LPG prices reach record high
During the year, LPG prices reached record highs, with some service stations retailing automotive LPG at $1.66 per litre, while elsewhere prices were $1.33 per litre or less. The AA knows of one site that sold LPG for $1.95 per litre.

“Like other finite energy sources, LPG commodity prices are generally on the rise, and just like petrol or diesel, our LPG prices are linked to the international price which jumped more than 60 per cent since the start of the year,” says AA PetrolWatch spokesperson Mark Stockdale.

“Fortunately, just like petrol and diesel commodity prices, the LPG commodity price has also begun falling in the last two months, so retail prices should also be coming down.

“The AA recommends LPG users shop around as not all service stations charge the same price. This is made difficult by the fact that service stations do not advertise LPG prices on their price board. We encourage motorists to check the price with the attendant before filling up, and to familiarise themselves with prices at other service stations to identify the cheapest retailer,” Mr Stockdale added.

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

Ends

For more information contact:
The New Zealand Automobile Association is an incorporated society with over one million members. It represents the interests of road users who collectively pay over $2 billion in taxes each year through fuels excise, road user charges and GST.

© Scoop Media