Petrol prices fall below $3 in main centres, and further drop expected

By RNZ.co.nz

While costs at the pump are looking lower, drivers can expect a further drop over the next week, says a petrol pricing expert.

No caption

AA says the drop in crude oil prices means petrol costs in New Zealand are likely to fall further next week. (File image) Photo: RNZ / Dan Cook

Costs in the main centres are well below $3, according to price tracking app Gaspy.

Early on Thursday afternoon, the app showed Waitomo on Tinakori Road in Wellington was charging $2.59 a litre; Caltex on Newton Road in Auckland was charging $2.65; and in Christchurch, Waitomo on Fitzgerald Avenue was charging $2.47.

Automobile Association principal policy adviser Terry Collins said the price of crude oil had dropped significantly in the past few days, meaning costs in New Zealand were likely to fall further next week.

A barrel of crude oil has dropped from $US110 to $US96.78 in less than a week.

“It’s come as a surprise on the international market, and it has been rapid over the last couple of days,” Collins said.

The decline came as a result of demand falling short of predictions in the US due to recession fears, he said.

“Why it was unexpected is because in the US and globally, demand is starting to come back a bit.

“The inventories in the US went up, and with weakening demand, prices went down as a consequence.”

Waitomo Group managing director Jimmy Ormsby said the drop was great news for customers.

“If the global price of crude is on it’s way down, then that’s reflected within a relatively short period of time at the pump in New Zealand,” Ormsby said.

“I’d say if there’s been a consistent drop this week, then you’d expect to see that at the pump within the next week to 10 days.”

However, Ormsby warned global crude prices were still fluctuating week-to-week.

Collins said an array of factors could kick costs back up, the most significant being further sanctions from the EU on Russia due to take effect in December.

Supply also remains tight and international demand is predicted to increase in coming months.

“We’ve still got China in the lockdown as a consequence of Covid, so when that demand starts coming up, that could have some consequences,” Collins said.

“It’s extremely volatile, there’s still a lot of things to be sorted out in the long term.”

The government’s fuel excise duty cut of 25 cents a litre have been extended until the end of January.

About The Author

Sometimes when a business is growing, it needs a little help.

Right now Kaniva News provides a free, politically independent, bilingual news service for readers around the world that is absolutely unique. We are the largest New Zealand-based Tongan news service, and our stories reach Tongans  wherever they are round the world. But as we grow, there are increased demands on Kaniva News for translation into Tongan on our social media accounts and for the costs associated with expansion. We believe it is important for Tongans to have their own voice and for Tongans to preserve their language, customs and heritage. That is something to which we are strongly committed. That’s why we are asking you to consider sponsoring our work and helping to preserve a uniquely Tongan point of view for our readers and listeners.

spot_imgspot_imgspot_imgspot_img

Latest news

Related news