Competition drives prices down

By Mike Dinsdale

10 comments
Local prices have dropped and are among the country's cheapest.
Local prices have dropped and are among the country's cheapest.

Whangarei motorists complaining about the latest petrol price hike are enjoying some of the cheapest petrol prices in the country, with motorists elsewhere paying for it, the Automobile Association says.

AA PetrolWatch spokesman Mark Stockdale said intense competition in the Whangarei market - rather than the proximity to the Marsden Pt Oil Refinery - meant the city was enjoying some of the cheapest petrol prices in the country, "and long may it continue."

He urged Northland motorists to shop around to avoid the impact of a 3 cents a litre petrol tax hike this week, with some service stations passing on the costs, some holding off for now and one in Whangarei even dropping its price.

However, BP Riverside, which dropped its price for 91 octane petrol by 4c a litre still has the most expensive fuel of the five Whangarei outlets monitored by the Northern Advocate at 205.9 cents a litre.

Yesterday, the Government imposed a 3c a litre tax hike on petrol and it was then up to petrol companies if they passed the rise, and associated half a cent a litre GST rise, on to customers at the pumps.

And when the Northern Advocate checked the five service stations in Whangarei and three in Kaitaia it monitors, not all had passed on the rise, yet.

Gull Otaika and Mobil Walton St had kept their prices the same, with both having 91 at 198.9c a litre at 2pm yesterday, the same as 2pm on Monday.

Caltex Tarewa Rd and Z Porowini Ave had both added the 3c a litre rise, with 91 now 201.9c a litre and 203.9c respectively. However, BP Riverside dropped its price by 4c a litre to 209.9c. In Kaitaia Z, Caltex and Mobil maintained their prices at 223.9c a litre for 91.

"There are some fantastic price competitions going on in Whangarei," Mr Stockdale, who monitors fuel prices around the country, said. "Those prices you have observed are 20 cents or more below the national price. The national price for 91 is 224.9c, so some places in Whangarei are selling it for 25 cents less below that which is great for motorists. Whangarei motorists are really benefiting from some very healthy competition."

He said Whangarei had plenty of owner-operated service stations, rather than oil company-owned outlets, which meant they did not have to stick to oil company prices. When there was such a competitive market the owner-operators had more room to cut prices.

"It hits the owners directly in the back pocket, not the petrol companies. But the petrol company-owned stores [in Whangarei] would appear to be discounting too. When that happens the companies don't lose out, they just pass the cost on to customers elsewhere, hence the 224c for the rest of the country," Mr Stockdale said.

He said having the oil refinery in Whangarei made no difference to the price of petrol at the pumps here as fuel was piped to Wiri, in Auckland, then trucked out to service stations. "The transport costs of [refined] petrol is very, very little, maybe 1c or 2c a litre at most, but your prices are 20c-25c below the rest of the country," Mr Stockdale said. He said motorists could get even cheaper fuel by using fuel discount dockets or other loyalty schemes. Yesterday's rise follows a 2c a litre increase at the pumps two weeks ago, which the industry blamed on higher world oil prices caused by the Iraq crisis.

- Northern Advocate

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