AA says pump prices should be dropping

Media Release: 1 August 2014
PetrolWatch – July 2014
AA says pump prices should be dropping

Despite a falling exchange rate, the AA says petrol prices should be falling too.

“Since the last price cut on 10 July, global petrol commodity prices have fallen nearly 10 US cents per litre. Allowing for the fall in the exchange rate, that equates to a drop in the imported cost of petrol of about 4 cents per litre, so the AA believes fuel companies should by cutting retail prices by about that amount,” says AA PetrolWatch spokesperson Mark Stockdale.

“Over the same period, the imported cost of diesel has risen, due to the falling Kiwi dollar, but nevertheless the AA does not expect diesel pump prices to rise yet. Fuel company margins have been above average so they can afford to absorb the increased costs,” Mr Stockdale added.

According to AA PetrolWatch, petrol prices rose a total of 1 cent per litre during July to end the month on $2.22 per litre at most brands. They initially rose 3 cents per litre on 1 July with the increase in excise tax, later falling 2 cents per litre. Diesel prices fell 6 cents per litre in July to $1.48 per litre at most service stations.

Check the pump price before filling up

AA PetrolWatch notes that the differential between 91 and 95 octane petrol is 8-9 cents per litre depending on brand. 98 octane petrol, where available, sells for about 16 cents per litre more than 91 octane. But the price gap between regular and premium grades may be higher if the service station is discounting the price of 91 octane. Many motorists are unaware of the price difference, as service stations tend to only advertise the price of 91 octane and diesel, so the AA recommends motorists check the price at the pump before filling up.

“The AA often gets complaints about the high price of premium fuels. Typically, motorists have unintentionally filled up with 98 instead or 95 octane, or the service station has discounted the price of regular petrol but not premium,” Mr Stockdale says.

“Either way, this confusion is compounded by the fact that most service stations don’t advertise the price of premium grades on their price boards. The AA thinks they should, and we have asked the government to make price boards mandatory, and to include the price of all fuels.”

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

Ends

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