‘Motorists will see a change’
The AA expects the extra cost of 95 and 98-octane petrol to plummet after BP, Mobil and Z Energy began falling into line with a demand to display premium fuel prices on their roadside boards.
AA policy manager Mark Stockdale said some petrol stations were charging 20 cents a litre more for 95-octane fuel than for 91, but he expected the difference would drop to less than 10c a litre as pricing became clearer for motorists.
The Commerce Commission advised the Government in December to require petrol companies to display the price of premium fuels on their roadside boards.
Stockdale expected the Ministry
of Business, Innovation and Employment to have regulations in place later this year.
But all three majors have started to make the change voluntarily ahead of time, including BP, which had argued strongly against regulation.
BP spokesman Gordon Gillan said it had begun installing premium-fuel pricing on roadside signs at eight BP Connect sites in Auckland and Wellington.
That work was expected to be completed by the end of February and the rollout at further sites would ‘‘follow thereafter’’, he said.
Z Energy, which had backed regulation in submissions to the Commerce Commission, said it expected to complete the rollout of ‘‘transparent price boards’’ across its Z and Caltex networks by June.
Commerce Minister Kris Faafoi had made it clear on the
day of the watchdog’s report that he expected quick action, Z spokeswoman Victoria Crockford said.
Mobil spokesman Rob Fitzgerald said it also supported regulation but was not waiting for it.
‘‘We are currently conducting an internal evaluation as we prepare to begin work.’’
The Commerce Commission said in its market study into the retail fuel industry that it was concerned petrol companies were charging a higher profit margin on premium fuels than on
91.
Requiring them to advertise prices on roadside boards would make it easier for drivers to shop around without driving up to the pumps, it said in its report.
95 and 98-octane petrol make up about 23 per cent of petrol sales, but the commission suspected some motorists might be buying it unnecessarily.
That was possibly due to ‘‘a lack of understanding about whether it is needed for their car or the benefits it provides’’, it said.
Stockdale said the commission’s recommendation on roadside pricing was one of the most significant to flow from its fuel competition study ‘‘and something the AA has been advocating for over several years’’.
It cost only 4c a litre more to produce 95-octane fuel, and the retail price differential had been held at 9c for several years before increasing to unjustifiable levels, he said.
‘‘The AA has received a lot of complaints from members about the price of premium fuel in particular.’’
There hadn’t been much change yet, but it was still early days, he said.
As more stations began displaying the premium on their roadside boards, the pressure for others to follow would ‘‘snowball’’ and competition would increase, he predicted.
The impact of premium fuel advertising on roadside boards ‘‘will be observable’’.
‘‘Our view is this will result in the price of premium petrol falling and the motorists buying premium petrol will see that change.’’
‘‘The AA has received a lot of complaints from members about the price of premium fuel in particular.’’
Mark Stockdale AA policy manager