Fuel prices hit two-year high
A second increase this week has pushed petrol prices in many parts of the country to the highest level in more than two years.
The major fuel companies raised the main port port price of fuel – used at stations in Wellington and much of the South Island and in areas without regional discounts – by 3 cents a litre on Thursday night.
The rise came hard on the heels of another increase of 3c a litre at the start of the week. The price of regular petrol is now $2.099 a litre.
Automobile Association (AA) data suggests it is the highest price for regions covered by the so-called ‘‘main port’’ price since July 2015.
The increase comes after the New Zealand dollar fell sharply in the weeks following the September 23 election, while oil product prices have been creeping higher.
A weaker dollar tends to make imported goods more expensive, with the impact seen most quickly in commodity goods such as fuel.
But in the last few days the exchange rate appears to have stabilised, prompting observers to question why retail prices had risen a second time.
AA spokesman Mark Stockdale said while the first of the increases could be justified by a weaker New Zealand dollar and stronger commodity prices, there was no further move which would warrant the second hike.
‘‘The AA can’t see any justification for why prices have gone up another 3 cents,’’ Stockdale said.
‘‘There’s been no further deterioration in the exchange rate or rising commodity prices to explain it.
‘‘When fuel prices don’t move in relation to observed changes in commodity prices and the exchange rate, motorists deserve an explanation.’’
The New Zealand dollar is stronger against the US dollar than it was at the start of the week, which would tend to make petrol cheaper.
A spokeswoman for BP said the latest increase was ‘‘predominantly driven by an increase in the cost of product, and further movement in the exchange rate’’.
Earlier this year a report by former energy minister Judith Collins found margins had increased in a way that was not proportionate to increased investment, and warned the market may not be operating competitively.
Stockdale said the AA was ‘‘absolutely’’ interested to find out the new Government’s position on retail fuel margins.
‘‘In Opposition Labour have been quite vocal around fuel prices and margins and so we’re hopeful that this issue won’t be left to fade away.’’