Tax rise brings October fuel price shock

Media Release: 3 November 2010

PetrolWatch – October 2010

Tax rise brings October fuel price shock

After a month of no price changes, October bought a price shock to motorists with petrol prices rising 11 cents during the month, mostly due to scheduled tax increases.

The price of a litre of 91 octane petrol rose from $1.74 in the main centres to $1.85 by mid-October. The diesel price rose six cents from $1.19 – where it’s been since July – to $1.25 per litre.

“The October price rises have been the biggest all year, and most of that has been due to the tax increases,” says AA PetrolWatch spokesperson Mark Stockdale.

“The GST rise added four cents per litre to the price of petrol, and three cents to diesel. Excise duty on petrol also rose three cents at the same time.”

“On top of that, the price of oil has risen sharply since August, breaking through the US$80 a barrel barrier for the first time since April. This added another four cents to the price of petrol, and three cents to diesel.

“The latter increases are, however, a little surprising because the value of the kiwi dollar has risen during the month. When you consider there has been a recent decline in commodity prices, the oil company importer margin – the difference between the retail price and landed cost of fuel – is certainly at the high end of the range, especially for diesel,” Mr Stockdale said.

AA PetrolWatch believes a drop in the price of both petrol and diesel is warranted.

“Lately the AA has noticed the oil companies are only moving prices up or down two cents per litre, when in the past they would have dropped four cents at the current margin. Pricewise, the market doesn’t seem to be as competitive as it once was. This is of concern and AA PetrolWatch will continue to monitor this situation,” says Mr Stockdale.

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

ENDS

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