Nelson’s the cheapest place to fill your tank
Petrol prices continue to drop around the country following a letter from the Government last Friday questioning fuel companies’ profit margins.
The price of 91-octane petrol is down around the country an average of 22 cents a litre, according to fuel-price tracking app Gaspy.
Gaspy director Mike Newton said the average price for 91 was $2.84 a litre.
If the drop in price was in response to the letter from Energy Minister Megan Wood’s rebuke, then prices would level out once margins returned to something ‘‘acceptable’’, Newton said.
On Thursday the average price of premium-fuel grade 95 was $3.02, a decline of 21c in the month; for 98 it was $3.21, a drop of 14c a litre. These grades accounted for about a third of the market, according to the Ministry of Business, Innovation and Employment.
Nelson was the cheapest region on average, at $2.73 a litre for 91-octane, according to Gaspy.
It was followed by Hawke’s Bay, $2.78 a litre, and Canterbury at $2.79.
The most expensive region was the West Coast, at $3.03.
The second most expensive was Northland at $2.96, followed by Gisborne at $2.93 a litre. Auckland came in as the fourth most expensive at $2.92. Wellington followed close behind at $2.88 a litre.
Otago was smack in the middle of prices around the country, at $2.84 a litre for 91-octane.
The Automobile Association’s principal policy adviser, Terry Collins, said prices could not keep falling forever, and he expected them to stabilise soon.
Collins said people should shop around to get the best deal, and to keep the petrol companies competitive.
In Auckland there was a $0.65c-per-litre difference between the cheapest and most expensive 91-octane petrol, he said.
For 95, the difference was more than 85c per litre.
‘‘I have seen price differences of over 40c within 2km of each other, so it is definitely worth it to shop around,’’ Collins said.
It was somewhat of a mystery why there was such a large price difference between 91 octane, and 95 and 98 octane petrol.
‘‘The price it comes into the country is within 4c to 5c a litre of each other, but somehow that translates to a 16c difference at the pump.
‘‘I imagine it was because retailers sell more 91, so they can make more money at less of a mark-up. For 95 they need separate storage tanks, and pumps, and don’t sell as much, so might require higher margins to make their money back.’’
Gull general manager David Bodger said ‘‘a whole lot of little things’’ contributed to the price difference between 91 and 95 octane fuel.
‘‘Higher-octane fuel is generally more expensive to refine, we sell significantly less of it for the same fixed costs, and we don’t turn it over as quickly. All of this contributes to it being more expensive,’’ he said.
Premium petrol contributed to high industry profitability, the Commerce Commission found in its 2019 report into the retail fuel sector.
The extra margin made by fuel companies did not appear to reflect the actual cost differences, the commission said.