AA calls for please explain on price rises

31 January 2017

AA calls for please explain on price rises

The Automobile Association is calling for fuel companies to explain to motorists why the national price of fuel rose 5 cents per litre during January, despite no increase in commodity prices or a drop in the exchange rate.

“Normally retail prices rise following an increase in the cost of importing fuel, but that wasn’t the case in January,” says AA PetrolWatch spokesperson Mark Stockdale.

“While commodity prices did rise in December, they have since fallen slightly while the New Zealand dollar has strengthened by over three cents. If anything, the retail price should have fallen, not risen by five cents. This is most unusual, and motorists deserve an explanation,” Mr Stockdale said.

Mr Stockdale said some service stations had been substantially discounting fuel, selling it for under $1.70 a litre. “At those prices, the service stations are selling it at or below cost. The AA suspects the rise in the national price – excluding any discount – is to help cover the cost of selling fuel at substantially lower prices elsewhere, and we’d like the fuel companies to confirm that.”

“The last time fuel company margins came close to the current level, the Government put the fuel companies on notice and asked them to justify the high margins.

“The AA believes the current high margins, and the unexpected January price rises, warrant further investigation as our Members are very confused by the large range in pricing,” Mr Stockdale said.

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