Petrol prices drop below $2 litre

Gull was the first to drop its petrol prices below the $2 mark. Photo / Supplied

Petrol prices have fallen below $2 per litre for the first time in New Zealand since August last year but the AA says the cut could have come sooner.

First to lower pump prices below the $2 mark was Gull on Tuesday, followed by other major companies yesterday.

Prices for unleaded petrol have dropped 20 cents in the past month which works out at a saving of about $8 for every 40 litre fill, BP external affairs manager Jonty Mills told Radio NZ today.

AA petrol watch spokesman Mark Stockdale told Radio NZ that would save the average motorist about $200 a year at the current price compared to a few months ago, he said.

Prices were coming down because of dropping commodity prices and our rising exchange rate, Stockdale told Morning Report.

"We think petrol companies are starting to catch up with the reduction in commodity prices."

But Stockdale said companies could have probably lowered pump prices sooner.

"We seem to be lagging the reductions in the commodity price by about a week. They're a little bit slow and at the same time our exchange rate is going up.

"But it's better late than never, they are passing on the price reductions even if it's just a few days behind."

He said further good news could be on the way.

"We weren't sure that we'd ever get prices that low again. But actually we wouldn't rule out another price cut at the pumps in the next week."

Gull New Zealand general manager Dave Bodger told Radio NZ that "nobody can accurately predict" what will happen to oil prices because of the political turmoil in Europe .

"You can't control what goes on in the Middle East...how the Greek population will make up their mind and how that will affect Europe."