PetrolWatch: Strong Kiwi dollar offsets higher prices

Media Release: 1 NOVEMBER 2013
PetrolWatch – October 2013
Strong Kiwi dollar offsets higher commodity prices
Petrol prices fell 5 cents per litre at the beginning of October, with diesel down only 2 cents per litre, before rising commodity prices put a stop to further pump price cuts.

The price of petrol fell to $2.12 per litre in the main centres, the lowest level in four months, with diesel retailing for $1.50 per litre at most service stations by the end of the month.

“October fuel prices were lower than the same time last year, and although fuel commodity prices rose during the month, these were more than offset by the strengthening Kiwi dollar which reached its highest level in 17 months. Unfortunately, the exchange rate has since fallen several cents while commodity prices remain steady,” says AA PetrolWatch spokesperson Mark Stockdale.

NZIER report finds no evidence of price gouging
Recent analysis by the NZ Institute of Economic Research has found no evidence of price gouging by fuel companies. The NZIER Insight report, number 43/2013, concluded that “petrol companies pass on oil price decreases to consumers just as quickly as they pass on increases in prices.”

“Although it’s more accurate to monitor refined petrol or diesel prices, not crude oil, the NZIER’s conclusion is the same as the AA’s own detailed analysis published on our website, as well as that of energy market experts Hale & Twomey,” says Mr Stockdale.

“Although some motorists may think that fuel prices are quick to rise and slow to fall, in reality pump prices closely follow movements in commodity prices and exchange rates, whether up or down. Independent analysis by three separate expert organisations will reassure motorists that the New Zealand fuel market is operating fairly and transparently,” Mr Stockdale added.

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

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