The Commerce Commission has lambasted fuel companies, saying motorists often paid more for longer than was justifiable, but a major retailer says many factors influence prices. Photo / 123rf
The Commerce Commission has lambasted fuel companies, saying motorists often paid more for longer than was justifiable, but a major retailer says many factors influence prices. Photo / 123rf
A consumer watchdog says motorists are losing out because retailers quickly raise fuel prices, but are slow to slam the brakes on when global oil prices fall.
But a major energy company today said it was already planning to pass some price cuts on to customers.
The Commerce Commissionsaid its latest analysis of fuel monitoring data showed New Zealand motorists often paid more for longer than was justifiable.
Commissioner Bryan Chapple said this happened due to lopsided or asymmetric pricing known as “rockets and feathers”.
Chapple said there was evidence fuel companies kept temporarily higher margins after a decrease in costs, lasting up to a fortnight.
”Our findings suggest that petrol prices shoot up at the pump in response to increased costs, but there is a noticeable lag in retail prices being lowered in response to decreases in underlying costs.”
The commission said if fuel companies dropped prices as fast as they increased them when costs changed, motorists would gain about $15 million a year.
Chapple said the issue was especially topical with the looming removal of the Auckland Regional Fuel Tax.
“The commission has clear expectations that fuel companies will promptly pass the benefit of this reduced tax through to consumers,” Chapple said.
Fuel delivered to the Auckland region from July 1 will be cheaper by 11.5¢ litre, he said.
“If fuel companies don’t reflect this drop promptly in retail prices, Aucklanders could be overpaying by nearly $1m in the first week alone.”
Z Energy said it was committed to giving customers a fair deal.
“We price our fuel competitively with the aim of offering value and service to our customers and undertake daily pricing reviews,” a Z spokeswoman said.
Z Energy says despite what the Commerce Commission claims, it already has plans to pass cost savings in Auckland on to consumers when the regional fuel tax ends. Photo / Warren Buckland
The cost of fuel at the pump comprised several factors, she said.
Those included global market fluctuations, shipping and freight costs, carbon prices and local competitive pressures.
“Decisions Z makes regarding any price changes (up or down) are based on the multiple price inputs. When you’ve got external factors like the oil price moving around a lot, we do our best to moderate the impact on customers a bit like a shock absorber.”
She said in the lead-up to the Auckland Regional Fuel Tax ending, Z was working to ensure the price change was immediately passed on to customers in full.
Since April 30, the New Zealand dollar has been mostly strengthening against the US dollar, but was still down against the US currency compared with the start of the year.
Consumer website Gaspy today said the price of unleaded 91 was down 7.22 per cent since mid-May.
Meanwhile, Chapple sent a warning to the petrol retailers.
”In a healthy and competitive fuel market, we expect to see changes in underlying costs fully passed through into retail prices promptly.”
He said the commission would be keeping a close watch on pricing tactics.
“This will include observing the pricing within and around the Auckland region before and after the Auckland Regional Fuel Tax is removed, and reporting on its findings.”
