Petrol prices fall to a two-month low

By David Loughrey

Petrol prices have dropped up to 18c a litre in the past two months. Photo / Duncan Brown
Petrol prices have dropped up to 18c a litre in the past two months. Photo / Duncan Brown

Petrol prices have dropped up to 18c a litre in the past two months as falling oil prices and a rising exchange rate result in a boon for motorists.

The New Zealand Automobile Association said yesterday the main centre price was 182.9c for 91 octane, 191.9c for 95 octane and 114.9c for diesel.

AA senior policy analyst Mark Stockdale said prices got as low as 174c at the start of the year, and 173c last year, with the latter figure the lowest since 2009.

This year prices rose to 198.9c for 91 in May before dropping.

Prices fell 6c a litre in the last few days, cuts led by BP.

The reductions were a combination of falling oil prices and an increase in the exchange rate, which had risen 2c in just over a week to its highest since May 2015.

Mr Stockdale said it was "impossible to predict'' future price trends.

"Nobody predicted the low prices over the Christmas period last year, and as it turns out oil prices have gone back up a wee bit.

"Nobody expected them to get as low as they did, and sure enough, they didn't stay low.''

However, he expected prices would remain relatively low and stable for the next few years.

When oil prices dropped, some refineries shut down because they were not economic to run. That reduced supply and caused prices to go back up.

"They won't stay low because refineries will shut down, and then the prices will go back up because there will be less supply.''

Once the price increased there was more oil production because people thought they could make money while the price was high, the result being over-supply, which caused prices to drop.

Mr Stockdale said it was anticipated there would be stability somewhere between those two extremes "not too low, not too high''.

"No-one's predicting oil running out any time soon.''

The lowest New Zealand price for 91 octane yesterday, according to the PriceWatch website, was 164.9c in Te Awamutu. The most expensive, at 213.9c, was on Waiheke Island.

- Otago Daily Times

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