Petrol hits $2 a litre for the first time in 28 months

The price of a litre of 91 octane petrol hit the psychological barrier of $2 in mid-January, the highest price since August 2008.

“Although the advertised price at most stations is $1.999 a litre, to all intents and purposes it’s $2 and that will be pause for thought for some motorists. The average car will now cost between $120 and $140 to fill up, $20 more than a year ago,” says AA PetrolWatch spokesperson Mark Stockdale.

The price of petrol rose 2 cents per litre during January, with diesel up 3 cents. Diesel now costs $1.37 a litre in the main centres, depending on brand, with 95 octane petrol $2.07 a litre. The latest price increase follows a 13 cent per litre rise in petrol prices during December, and a 9 cent increase in diesel prices.

“The price increases in the last two months reflect rising crude oil prices which climbed over US$12 a barrel, reaching US$100, the highest price since late 2008. Even allowing for our strong exchange rate, the net imported cost of petrol has risen 15% since the beginning of December 2010, with the cost of diesel up 12%,” Mr Stockdale said.

“The last time commodity prices were this high, we were also paying $2 a litre – but taxes were 13 cents lower, although the exchange rate was worth 8 cents less. By comparison, the price of diesel, which has no fuel excise, was $1.60 a litre, due to a higher commodity price relative to petrol at that time.”

According to AA PetrolWatch, the oil price averaged US$80 a barrel during 2010. The retail price of petrol rose 34 cents per litre in 2010, with 10 cents of that due to tax increases. At current commodity prices, the imported cost of petrol makes up about 94 cents of the price of a litre of petrol – and taxes another 88 cents.

For more information, go to: www.aa.co.nz/aapetrolwatch

ENDS

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