Price war ceasefire

PetrolWatch – May 2015

Price war ceasefire

Fuel prices in many parts of the country rose a total of 2 cents per litre during May, but in other areas the price rise was much higher as the long-running price discount war suddenly came to an end.

The price of 91 octane petrol at most outlets began the month on $2.03 per litre – the first time it had been over $2 since early December – and rose to $2.10 per litre before falling to end the month on $2.05 per litre. Diesel prices in many of the main centres initially rose 7 cents to $1.36 per litre, before dropping to $1.31 per litre.

But in parts of Auckland, Whangarei, Waikato, Bay of Plenty, Hastings, Manawatu, Wanganui, Levin and Masterton – where there had previously been heavy price discounting – prices at many service stations suddenly rose from below $1.90 a litre to over $2 per litre.

“Many lucky motorists had not seen petrol prices over $2 a litre for over a year thanks to intense local price competition which was sometimes more than 30 cents below the price being charged in much of the South Island and lower North Island,” says AA PetrolWatch spokesperson Mark Stockdale.

“The price war came to an end during May with Gull being the first to substantially raise prices, although in a few locations there is still some heavy discounting with the price of 91 petrol below $1.90 a litre. As ever, the AA advises motorists to keep a close eye on price boards and shop around for the lowest price.”

“Although fuel prices ultimately rose just 2 cents per litre during May for many motorists, the AA’s monitoring shows commodity prices rose about 8 cents a litre, including a drop in the exchange rate.

“The reason pump prices haven’t matched the increase in commodity price increase appears to be because during the price war, fuel companies had been cross-subsidising their discounts in certain locations with higher prices elsewhere and can now afford to reduce their margins, which have fallen to levels last seen in mid-2014,” Mr Stockdale said.

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

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