PetrolWatch - Falling dollar leads to higher fuel prices

4 June 2013

A 10-week run of falling fuel prices came to an end in mid-May with petrol prices rising 7 cents per litre, and diesel 4 cents during the month.

The price of 91 octane petrol rose to $2.12 per litre in the main centres, while diesel climbed to $1.46 per litre at most service stations.

“After the commodity price for petrol had fallen 19 cents per litre from February to April, and diesel 16 cents, the imported cost of both fuels rose by about 8 and 6 cents respectively in May, nearly half of which was due to a 3 cent fall in the exchange rate against the US dollar,” says AA PetrolWatch spokesperson Mark Stockdale.

“Even so, because fuel companies had not passed on all of the earlier commodity price reductions, the AA does not consider it was necessary to raise petrol prices another three cents just before the busy Queen’s Birthday holiday weekend when there would inevitably be more motorists filling up on fuel,” Mr Stockdale added.

“This is evidenced by the fact that although the imported cost of diesel rose 6 cents per litre, retail prices only rose 4 cents to reflect that fuel company margins were above average and pump prices had not previously fallen enough.”

At current commodity prices, the imported cost of petrol makes up less than half of the retail price (95 cents per litre), with taxes another 89 cents. The remainder is the fuel company margin. By comparison, the imported cost of diesel is 97 cents per litre, so if excise tax was included in the price of diesel, as it is in petrol (instead of the separate Road User Charges), the retail price of diesel would be about $2.14 per litre.

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

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.

ENDS

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