Petrol price plunge - is there still room to fall?

Petrol prices have been fluctuating over the last couple of months, but AA Petrol watch spokesperson Mark Stockdale says it is hard to say whether pump prices will keep falling.

National pump prices are determined by the international price of refined oil and the exchange rate at the time, currently priced around $1.70 per litre of 91 octane.

Stockdale said in order for petrol prices to fall further, the exchange rate and international prices need to line up.

READ MORE:
• World shares fall on oil slump
• Petrol prices plunge - big cut tipped for tomorrow
• Petrol price war heats up in Auckland

"What we have seen in the markets over the last couple of months has shown that it is hard to know what to expect."

He said it is almost impossible to predict another drop.

"There is definitely the capacity for further drops, but it is hard to know when."

Global market volatility has influenced the recent drop in pump prices.

Over the last 15 months crude oil has dropped from US$105-110 per barrel to US$30 per barrel, dropping approximately 70 per cent.

National petrol prices have dropped only 20 to 24 per cent from the highest pump price of $2.20 per litre, in comparison to the price of crude oil falling around 70 per cent.

General manager of Gull New Zealand Dave Bodger said the difference in drop is due to a number of external factors including the cost of refining oil and government tax.

Bodger said it is impossible to predict when or how far the petrol prices will fall.

"The reality is I don't know what the Saudi king is thinking," he said.

The average price of petrol trading at Gull is $1.59 per litre of 91 octane and 78.2 per litre of diesel.