Petrol prices in Hawke's Bay dropped to their lowest in more than eight years - cheaper per litre than milk.

Leading the way was Gull which was charging $1.55.9 per litre of 91 Octane and 74.9c per litre for diesel at its unmanned self-serve station in Karamu Rd, Hastings, a cent less per litre of 91 Octane than was offered at Napier's Gull Taradale Rd and Caltex Hyderabad on December 17. Gull is thought to have otherwise been the lowest price in Hawke's Bay since October 2007 when the regular price was $1.55.9 at Gull Omahu Rd, Hastings.

Gull national retail manager Graham Stirk said the latest price is part of a 36-hour monthly promotion due to "run-out" at midday today, but the fact that it was down on last month's Hastings offer of $1.57.9 for 91 and 82.9c for diesel, reflected the worldwide oil-price decline.

The company's 91 Octane price will "go back up" at least 10 cents this afternoon, but Mr Stirk said: "Who knows where it's going?"

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The lowered price had an immediate impact throughout Hastings and Napier, but while no others were able to match the Gull Karamu Rd price, motorists would be able to fuel up at a range of prices using fuel cards and supermarket vouchers.

Elsewhere in Hastings yesterday, the BP and Mobil stations at Stortford Lodge and two Omahu Rd stations, including Gull, were charging $1.59.9 for 91 Octane and 77.9c for diesel, while two Heretaunga St East stations, including the Pak n' Save discounter, were each charging $1.61.9 and 79.9c, as were the two Karamu Rd stations nearest the Gull price-leader, including Z across the road.

In Napier, prices ranged from $1.59.9 and 77.9c at Pak n' Save, Mobil and Gull in Taradale Rd, and Caltex Hyderabad Rd, to $1.71.9 at BP Carlyle (and in Clive) while smaller operator Challenge had $1.73.9 at its lone station in Napier.

The prices at the Pakn'Save pumps are now considerably cheaper than the $2.15 a litre for Anchor milk in their supermarkets nearby.

But northern and southern Hawke's Bay were still battling higher costs, with $1.72.9 being charged in both Wairoa and Dannevirke.

While welcomed by motorists, the cuts - about 10c a litre down on petrol prices earlier in the week - are still about 50 percent higher than in Australia, where three stations in Sydney on Tuesday dropped the price of "unleaded" petrol to under $1 - one in Blacktown was at 97.9c ($NZ1.05).

A motor industry group in Australia had early that day listed the lowest unleaded petrol price in any of the Australian state capital as the $A1.04.1 in Adelaide. It was followed by Sydney ($1.08.1), Melbourne ($1.09.1), Brisbane ($1.20), Perth ($1.25), Darwin ($1.25.1), Canberra ($1.25.8) and Hobart ($1.29.6).