Oil prices reach 30-month highs

Oil prices reach 30-month highs

The price of oil continued to rise during February, jumping US$15 a barrel (15%) to reach US$115, a figure not seen since August 2008.

The rising cost saw a litre of 91 octane petrol increase 3 cents per litre to $2.03 per litre in the main centres, with diesel rising 6 cents to $1.43 at most stations.

“Ordinarily, the big jump in oil prices due to the crisis in major oil exporter Libya would have led to a large increase at the pump in New Zealand during February, but the oil companies held off raising prices until March due to the Christchurch earthquake and the need to maintain fuel supplies into the city. Even then, the oil companies have chosen not to increase prices in Christchurch for the foreseeable future, which is commendable,” says AA PetrolWatch spokesperson Mark Stockdale.

“We calculate that the imported cost of petrol has risen 10 cents per litre since the last pump price rise on 16 February, which is double what the oil companies have passed on at the pump, and their costs have increased again since then.

“Unless oil prices drop soon, it is likely that retail prices will rise again.”

According to AA PetrolWatch, the last time oil prices were this high, 91 octane petrol cost $2.03 per litre – but petrol taxes were 13 cents lower. Yet diesel, which has no fuel excise, was $1.80 per litre due to a higher commodity price relative to petrol at that time. At current prices, the imported cost of petrol makes up $1.10 of the retail price of a litre of petrol, and taxes another 89 cents.

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

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