Petrol companies responsible for interest rates rises or freezing wages

The failure of petrol companies to pass on lower oil prices to consumers could mean we will be facing higher interest rates or a wage freeze.

Today the Reserve Bank Governor said that unless wages are allowed to be eroded by inflation, interest rates may increase.

"Petrol prices have increased by 14% since February, over the same time crude oil prices, adjusted for the value of the NZ dollar, have actually decreased," Deputy Prime Minister Jim Anderton said.

"Petrol price increases have significantly contributed to the inflation rate. Today the Reserve Bank Governor suggested that a wage freeze or an increase in interest rates may be necessary because of continuing high petrol prices.

"It is appalling that petrol companies can hold the country to ransom.

"Crude oil prices started falling on the 17th of July. They are now lower than they have been for five months. But petrol prices have not moved down.

"Petrol companies put the price of petrol up much faster than they bring it down.

"If interest rates rise, it is not workers or businesses who are to blame but the failure of petrol companies to pass on lower oil prices to consumers," Jim Anderton said.

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