Fuel prices lowest since January

4 November 2008

PetrolWatch - October 2008

Fuel prices lowest since January

Pump prices sustained large drops during October, with petrol falling 23 cents per litre, and diesel 16 cents per litre. The price of 91 octane and diesel ended the month on $1.73 and $1.32 respectively in the main centres, the lowest prices seen since the beginning of the year.

AA Senior Policy Analyst Mark Stockdale says "the continued reduction in pump prices reflects sustained falls in the international price of oil and refined fuel. It couldn't come at a better time for motorists, as we move into the busy summer driving season."

It's the tenth consecutive price reduction since mid-July. Petrol has dropped 46 cents per litre (21%) since reaching a record high of $2.19 on 7 July Diesel prices have tumbled 60 cents per litre (31%), down from $1.92.

"Since July, international market prices have fallen by over 50%, but unfortunately the New Zealand exchange rate has also fallen substantially since then, offsetting some of the savings from lower international prices. In any case, the product cost makes up less than half the pump price."

In total, the New Zealand dollar has lost 17 cents against the United States dollar. According to AA PetrolWatch, petrol and diesel prices could be about 25 cents per litre cheaper if the exchange rate was still around 77 US cents.

"The international prices have been falling due to a combination of declining global demand as a result of the previous high prices, and the financial crisis. So, subject to our exchange rate, it looks like the trend for lower prices will be with us for a while yet," says Mr Stockdale.

ENDS

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