PM Luxon, ahead of embarking on his trip to China, addresses Israel's 'preemptive strike' on Iran's capital
Israel’s attack on Iran today has sent oil prices up.
But any impact on New Zealand motorists and flyers should at least be delayed, the Automobile Association said.
“I saw the pre-attack indicators,” AA principal policy adviser Terry Collins told the Herald.
“The price of oil jumped about US$5[$8.31] in a 24-hour period, so the market had got wind of it.”
The United States said non-essential staff would leave its embassy in Iraq and US President Donald Trump on Thursday said an Israeli attack on Iran “could very well happen”.
That was when companies were quick to put prices up, and slow to bring them down.
Smoke rises in Tehran early on Friday as Israel carried out a major attack intended to cripple Iran's nuclear programme, Israeli officials said. Photo / New York Times
He said the fuel Kiwis were buying at retail outlets now was purchased more than a month ago and refined.
“So we should not see an immediate jump and I hope that does not happen.”
He said that since the oil refinery in Northland was shut down, the country imported refined fuels from Singapore, Korea, and other parts of Asia.
“It takes at least a month to come down generally, to get it shipped out of Singapore,” he added.
“You’ve also got to remember that if you look at today’s price, that’s for next month’s contract.
“So in theory, the price that Kiwi motorists pay shouldn’t go up significantly for a month.”
He advised against stockpiling.
“It’s a dangerous activity and it could negate your insurance, particularly around your household if you were to do it.”
Collins added: “You don’t need to panic buy it.”
He said if big petrol retailers did decide to hike prices immediately, legal consequences could follow.
“Look, they can’t collude together because they’d get themselves in trouble with the Commerce Commission.”
He added: “It’s still a little bit of time before we work out exactly where the market’s going to move. But at this stage, based on one event in a very short period of time, we should not see an immediate jump in fuel.”
But over the next few weeks or a month, prices could go up, he said.
That applied to petrol, diesel, and aviation fuel.
Collins said about 40% of international oil was used for producing goods and about 50% for transport.
Aviation fuel used in New Zealand largely emanated from the same refineries as other fuels New Zealand imported, he said.
He said airfares should not go up soon.
“But long-term, we just have to see, because fuel is one of the base inputs for aviation.”
Israel today said it had launched pre-emptive strikes against Iran’s nuclear sites.
The Iranian regime reportedly said Israel unleashed a “wicked and blood-stained hand” against it.
New Zealand Prime Minister Christopher Luxon today said armed conflict between Israel and Iran could be potentially catastrophic for the Middle East.
John Weekes is a business journalist covering aviation and courts. He has previously covered consumer affairs, crime, politics and courts.
