Drone attacks could push up petrol costs
Petrol prices could rise within days in New Zealand as a result of attacks by Yemeni rebels on Saudi Arabian oil facilities at the weekend, both BP and the Automobile Association have warned.
Houthi rebels launched drone attacks on the world’s largest oil processing facility in Abqaiq, Saudi Arabia, and the major Khurais oil field, sparking huge fires.
The Wall Street Journal reported the attacks had shut down half of the country’s oil production, which analyst OilPrice. com said would be equivalent to reducing global supply by about 5 per cent.
OilPrice.com suggested oil prices could spike above US$100 (NZ$156) per barrel in the wake of the attacks when oil markets reopened, up from their current price of about US$55 a barrel.
While Saudi Arabian oil company Aramco was confident it could recover quickly, if it couldn’t, the world could face a production shortage that could send oil prices ‘‘into the triple digits’’, it said.
BP spokesman Gordon Gillan said its prices were reflective of the oil price in international markets among other influencing factors ‘‘so it is possible there could be an impact on local prices later this week’’.
BP did not want to speculate further, he said.
‘‘We review our BP Connect prices every day so our prices are as competitive as possible,’’ Gillan said.
The cost of fuel accounts for only about a third of the price of petrol, with much of the remainder represented by taxes.
That meant prices at the pump would not rise as much as the price of oil but the impact ‘‘could be concerning’’, AA spokesman Mark Stockdale said.
‘‘It could have a negative impact which would inevitably flow through to the pump.
‘‘We have to wait and see but it is certainly not helpful. It is these sort of geopolitical events that can lead to fuel price spikes and they are outside the control of fuel companies, the Government and Kiwi motorists,’’ Stockdale said.
Z and Mobil have also been approached for comment.
A barrel of oil equals about 159 litres, which means each sustained US$10-rise in the price of a barrel of oil could be expected to push up the price of petrol, diesel, jet fuel and other derivatives by an average of about 10 NZ cents a litre.
Changes in the price of oil flowed promptly through to the pump prices of petrol and diesel, Stockdale said.
‘‘The way the fuel price works in New Zealand is that it is benchmarked to the commodity price.
‘‘We have seen in the past that the price at the pump reflects changes in the commodity price within the following day or two.’’
‘‘It is these sort of geopolitical events that can lead to fuel price spikes and they are outside the control of fuel companies, the Government and Kiwi motorists.’’ Mark Stockdale AA