Decline in oil price reinforces AA call
The Automobile Association says a big drop in the international oil price earlier this week reinforces its position that costs at the pump need to fall by at least 5 cents a litre.
Petrol is selling in the main centres for 216.9c a litre.
Petrol costs have been sliding sporadically for the past four weeks, with a litre of 91 octane last selling at a national industry average of 218.6c, according to Ministry of Business, Innovation and Employment figures.
That has largely tracked a steady decline in the cost of oil, but since then Brent crude has shed 3.7 per cent of its value after the United States Government said yesterday that oil stockpiles were at their highest level in 22 years. Brent crude last traded at US$107.11 a barrel.
AA spokesman Mark Stockdale said although fuel prices were determined by refined petrol prices and not crude oil prices, a drop in the raw commodity cost meant there was probably room to cut endmarket prices.
‘‘Really, fuel companies are not cutting prices fast enough or far enough,’’ he said.
The ministry’s figures show that although retailers have been cutting prices to reflect lower commodity costs since February, their profit margin has increased.
The industry most recently made a 12.5 per cent return on each litre sold as the ‘‘importer margin’’, up from 10.2 per cent in February.
Oil companies, meanwhile, reiterated their long-standing position that the focus on margin is too narrow, and that the role of retailers is to shield customers from rapid price spikes.
Crude oil prices, for example, have traded in a choppy range since the February high of US$119.17 for Brent crude, to their present level at US$107, while consumer prices have declined gradually.
In addition, industry players stress that energy costs are only part of their cost base, the others being transport, corporate and network, which do not move in tandem with commodities.
BP spokesman Jonty Mills said that BP continued to review prices daily, and would pass on any price adjustments when they were applicable.