Families will be the first to feel the pinch as petrol prices soar to an all-time high, a Rotorua community worker says.
The cost of fuel reached a national average of $2.23 a litre this week - its highest level since May last year when it peaked at $2.22.
Bryan Martin, director of community ministries for the Rotorua Salvation Army, said many people would have to cut back on "non-essential" activities.
"Family outings, where you use your car for trips, will be the first to go," he said. "It's really hard for parents because there is not much they can do about it."
Several stations in Rotorua were offering prices below the $2 mark this week, giving local motorists the nation's best deal on fuel, but AA spokesman Mark Stockdale has warned prices are likely to get even steeper.
There were various reasons for the latest price hike, including increased taxes and import fuel costs, he said.
"What we're facing - amongst a lot of things - is inflationary cost increases.
"Wages have increased [and] transport costs have increased. And therefore, it costs more to ship fuel and truck fuel."
Mr Stockdale said fuel companies were also partly to blame.
"They are passing the costs on, but also they are making more money," he said. "The amount they earn now is higher than a few years ago."
He recommended motorists regularly maintain their cars and drive in a fuel-efficient manner to ensure they get the most from their money.
"For many people they don't have a choice - they need their cars," he said. "So they will have to cut back in other areas [and] make sure they think about how they are driving."
Motorists in the regional centres had a better chance at saving on fuel than their big-city counterparts, he said.
"Because of regional competition amongst some of the stations, sometimes the prices in rural areas can be lower."
Despite the record, University of Canterbury economics professor Eric Crampton said prices were actually higher in 1981, when adjusted for inflation.
"Back then petrol prices were less than 60c a litre. While that sounds wonderful, when you adjust for inflation, that is $2.46 per litre in today's dollars, much more than we are paying now."
Five ways to save:
Regular maintenance checks
Checking your tyre pressure at least once a month can save you up to 18c a litre on fuel.
Lighten the load
Remove all unnecessary objects. A heavier vehicle has to work harder and will use more fuel.
Go easy on the accelerator and brake pedals. This will not only save fuel but is also better for your car in the long run.
Watch your air con
Air conditioning is more fuel efficient than having your windows down as this creates drag. But don't over do it as it can use up to 8 per cent more petrol.
Turn it off
As a rule, you should turn your engine off if you're standing still for more than 30 seconds. Also avoid peak hour traffic.
Source: Automobile Association