‘Gull effect’ fuels price gaps
Ahuge discrepancy in petrol prices across the North Island, including the Auckland region, is being driven by the “Gull effect” — which the AA say is creating “outrageous” and unsustainable pricing.
As national petrol prices reached new levels this week, hitting $2.30 per litre in larger centres, the has compared the going rate among the Super City’s petrol stations.
The price of 91 has risen by nearly 20c a litre since January when it was $2.12 and climbed past the previous high of 2013 when it was $2.27.
But Gull dropped its fuel prices by 12 cents, starting a price war.
Its promotion, due to end at midday today, separates the cheapest and costliest fuel across the country by more than a dollar.
Prices gathered through the fuel price comparison app Gaspy showed Auckland’s lowest-cost fuel stations were Gull in Titirangi and Millwater where the pump price was $1.87 at the pump.
Gull stations in Wellsford, Papakura, Wiri, Papatoetoe, Takanini and Onehunga were also selling 91 at cut prices.
Petrol stations close to the airport charged $2.29, while both Z and BP 2go stations on Waiheke Island charged $2.50.
The country’s cheapest petrol was further down the country, at a small Gull station on State Highway 1, between Rotorua and Taupo¯.
Gull Atiamuri was charging $1.807 for 91, $1.957 for 98 and $1.107 for diesel.
Robbie and Nikki Hooker live in Kinloch, but are regular visitors to the Atiamuri station, half an hour up the road.
“We’ve just come through Tokoroa and we saw $1.16 for diesel, and we thought, ‘Do we risk it’, but I said ‘No, Atiamuri will be cheaper’.
“As we came down the hill and saw $1.10. I was like ‘Yes’,” Nikki said cheering.
The couple said it was definitely the cheapest they had seen in quite a while.
In New Plymouth, the price war was obvious with Gull advertising 91 octane for $1.87 while Caltex and Mobil were not far behind on $1.89 and $1.91.
The AA’s Mark Stockdale attributed the competition to the pres- ence of brands like Gull, with lower overheads than the bigger brands, expanding across the country.
“The higher the margin, the more attractive it is for these smaller brands to expand,” Stockdale said.
“They see the high margins that the bigger places are making and they want a slice of that action.
Stockdale said the “Gull effect” often meant prices would stay low in areas with cheap suppliers like Gull, as other outlets fought to stay competitive.
However, Stockdale called fuel prices as low as $1.87 “unsustainable”. Taking into account the cost of raw petrol and taxes, he said outlets could not stay profitable with prices that low.
“Marketing tactics like that are just trying to entice customers and create loyalty,” he said.
Because Gull was a discount supplier it favoured setting up in lowercost parts of the city and avoided areas with higher rents, Stockdale said. “If you’re a low-cost brand you need to operate in low-cost areas.”
Mobil on Ormiston Rd and BP Connect in Flatbush were selling fuel at $1.89 last evening — just a few cents below the Gull outlet in the nearby East Tamaki area.