Aussie fuel prices drop as NZ drivers face rise

Photo / APN

Petrol prices are falling at Australian pumps - but oil companies in New Zealand say motorists shouldn't expect the same here.

Industry experts in Australia predict the price of regular unleaded could fall to as little as A$1 ($1.29) a litre, as the average cost drops in response to a strengthening Aussie dollar and increased competition among retailers.

The cheapest petrol in Sydney yesterday was A$1.14 a litre - $1.47 at current exchange rates.

During August, the AA PetrolWatch said prices dropped in New Zealand's main centres from $1.76 to $1.74 a litre for 91 octane.

But AA spokesman Mark Stockdale said New Zealanders pay higher tax on their fuel, and the strong Australian dollar must also be taken into account.

NZ drivers pay 56c a litre in fuel excise, another 3c a litre for the emissions trading scheme and 12.5 per cent GST, he said.

Australians pay 38c a litre (49c) in excise and 10 per cent GST.

However, Australia's prices vary from day to day and region to region much more than New Zealand's.

An Australian Competition and Consumer Commission report on the sale of petrol said retail prices in main cities moved in regular cycles over a period, usually a week, with no direct relationship to cost prices.

Prices also differed regionally to reflect freight and storage costs.

Petrol prices move less frequently in New Zealand, approximately 30 times a year compared with around 250 times in Australia, and the movements tend to be in line with international benchmarks.

BP New Zealand spokesman Neil Green said his Australian colleagues were able to publish petrol prices in advance, a sales tactic not allowed here.

Mr Stockdale of the AA said that unlike in Australia, New Zealand had a national wholesale pricing system, which meant the cost of shipping to ports, and trucking the fuel from there to most locations, were averaged.

"The price retailers pay in Auckland is the same as the price to Invercargill. Southerners don't pay more, it is absorbed over the country," he said.

Experts caution that Australia's low petrol prices may be short-lived as an increasingly buoyant global economy could see prices go up, and the Australian dollar go down against the US.

Mr Stockdale warned that up to 7c a litre would be added to fuel prices on October 1 - 3c in excise and 3c (diesel) or 4c (petrol) in goods and services tax.

WHO PAYS WHAT

Fuel taxes

Australia:
* 49c a litre excise *
* 10 per cent GST

New Zealand:
* 56c a litre excise (rising to 59c on Oct 1)
* 12.5pc GST (rising to 15pc on Oct 1)

Pump prices

* $1.74 a litre in NZ for 91 octane in August
* $1.47 in Sydney now *

All figures in NZ currency

* based on exchange rate of $1 = A$0.77