Drives to the beach could be costly this summer
Kiwis may be in for an expensive summer at the pumps as a result of a deal to cut oil production overseas, says the Automobile Association.
The price of Brent crude oil on Thursday soared 10 per cent to US$ 52 ($ 73) a barrel after the Opec cartel agreed to cut production for the first time since 2008 in an attempt to address a global supply glut and lift prices.
AA petrol prices spokesman Mark Stockdale said there had already been a 2c jump in petrol prices here in response, even though the deal would not take effect until the new year.
“We’ll have to see what impact it has on the refined commodity price but [ increased crude oil prices] are likely to be passed on to the refined commodity price and that being the case it can only mean one thing: rising prices.”
The price of 91 octane is exactly the same as it was this time last year at $ 1.94 per litre.
However, last year prices plummeted at Christmas time and Stockdale said the opposite would likely occur this time around.
“This time last year prices kept falling and falling and we had low prices during the busy Christmas- New Year season, and that was really great news for motorists,” he said.
The question would be how much oil prices would rise and when this would take effect.
“I would imagine that would happen fairly soon.
“I mean, the oil price has already gone up and prices change quickly in response to moving commodity prices.”
Opec, which i s made up of the world’s richest oil nations, said it would reduce output by 1.2 million barrels per day ( bpd) to 32.5m bpd from January for at least six months.