The minister’s letter to fuel companies

Energy Minister Megan Woods sent a letter to fuel companies questioning why their margins were at ‘‘historically high levels’’. Four days later, the price of fuel dropped.

Woods sent the letter on Friday. A copy provided by her office shows she was concerned about ‘‘a sharp increase’’ in importer margins recorded during the week ending Friday, July 8.

‘‘Compared to the previous week importer margins increased by 43.5% or regular petrol, 32.4% for diesel and 30.9% for premium petrol. I understand that fuel companies are not always able to immediately adjust prices to match shifts in costs.

‘‘I expect to see the recent decrease in importer costs to be passed through to consumers at the pump in the coming weeks,’’ the letter read.

The price of Dubai crude oil, tracked by the Ministry of Business, Innovation and Employment (MBIE), had fallen from a high of $182.99 per barrel on June 17, to $157.74 almost a month later. (During this period, there was a week when it rose from $173 to $178, before again falling.)

The MBIE data also recorded the margin being taken by the fuel companies as 61 cents a litre. This was twice the margin being taken

two weeks earlier, in late June.

Woods reiterated her concern at a press conference on Sunday, at which Finance Minister Grant Robertson said the Government would be extending a 25c cut on the fuel excise tax until January 2023.

The Government had provided the tax cut to reduce a rapidly rising fuel cost, which has been driven by international factors including Russia’s war in Ukraine. The expectation from the Government has been for the fuel companies pass on this tax cut to the consumer. Yesterday, the price of fuel did drop.

In Auckland, the price of 91 octane petrol was between $2.88 and $3.05 a litre across stations yesterday morning. Prices had dropped below $3 in Wellington and Christchurch.

Fuel companies have said there are multiple factors influencing price at the pump, and lower costs can’t always be passed on immediately.

Z Energy communications manager Haley Mortimer said, after declines in the Brent Crude price, the company made the decision to drop its prices for the Monday morning commute, ‘‘well before’’ the Government’s Sunday announcement.