Petrol Hits $1.50 – To Ignore It Would Be Stupid

31 August 2005

Media Release

Petrol Price Hits $1.50c A Litre – “To Ignore It Would Be Stupid!”

Businesses have few options but to take into account the rising price of petrol in how they run their firms and price goods and services, said Michael Barnett, chief executive of the Auckland Chamber of Commerce.

“As well as affecting distribution costs, the rising price of petrol feeds into production and other overheads through its impacts on inflation.”

The many businesses operating on low margins would be stupid to ignore the rising price for too much longer, he warned.

“It is a trade off to survive - putting up prices to cover rising petrol costs destroys turnover and turns customers away. Failing to put up prices to cover the rise in petrol costs could destroy the business absolutely.”

Retailers in particular will notice the impact on people’s buying power. In environments of low disposable income, some people will be paying more for transport costs of getting to work and will have their buying power reduced as a consequence.

ENDS

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