Coronavirus: Oil price plunge and what it means for motorists in New Zealand

Oil prices plunged as much as 30 per cent as markets opened Monday morning. Photo / Peter Meecham

Kiwi motorists will not know until tomorrow whether fuel prices will reflect a dramatic plunge in oil prices witnessed on the market this morning.

However, the national price of petrol had fallen by 16 cents since the start of the year and there was no reason the trend would not continue, AA Petrolwatch spokesman Mark Stockdale said

The reductions in fuel prices had been due to a drop in demand worldwide, which was being blamed on Covid-19.

"Most of the reductions that we've seen since January have been due to declining demand and most of that has occurred since the outbreak," Stockdale said.

"It's likely there'll be another drop at the pump this week … given the reductions that we've seen so far over the last couple of months."

The current average for 91 octane in New Zealand was $2.25 and $1.59 for diesel.

Oil prices fell as much as 30 per cent this morning when the markets opened - the biggest single-day fall since the start of the Iraq war in 1991.

But despite this, Kiwi motorists would only know if pump prices would reflect the plunge tomorrow once the commodity price was announced.

"It's likely the commodity price will respond to the very latest oil price drop and fall as well," Stockdale said.

"Once we see what [the price is], then we'll say 'what does that translate to in New Zealand dollars?' and we'll know roughly how many cents at the pump that should be."

Since Friday, the national price of fuel had dropped 4 cents, Stockdale said.

Today's oil price drop also followed falls of 10 per cent at the weekend on fears that Russia and Saudi Arabia will launch a full-scale price war.

Brent crude was currently down about 20 per cent.