91 petrol jumps by 6c a litre to record

Middle East conflicts yesterday drove petrol and diesel to record prices at New Zealand pumps.

Oil companies lifted the price of petrol by 6c a litre and diesel by 4c.

Most main-centre service stations were last night selling standard 91-octane petrol for $1.77c a litre and 95-octane for $1.82c, more than 35 per cent higher than prices a year ago.

Although the diesel rise was more restrained - up to $1.28c a litre - it is still a 50 per cent hike on the price a year ago, and does not include Government charges.

Prices jumped as Statistics NZ said annual inflation had hit 4 per cent, driven largely by petrol prices one-third higher than a year ago.

It blamed raised petrol prices since the end of June last year for a 1.1 percentage point increase to 4 per cent - higher than most economists' expectations of 3.7 per cent.

The Council of Trade Unions, in a swift response, declared workers needed a healthy catch-up. "High petrol prices have a significant effect on low-income workers," said council president Ross Wilson.

"Unions will continue to push for decent wage increases this year."

He said workers needed regular above-inflation pay rises to correct a "structural problem" of wages being about 35 per cent lower than in Australia.

But UBS merchant bank senior economist Robin Clements said that would force the Reserve Bank to tighten the money-supply screws with higher interest rates unless there were productivity gains.

Fuel companies blamed the widening conflict in the Middle East.

Caltex spokeswoman Sharon Buckland said the increases were "hugely regrettable" but oil companies in this country had no control over international events.

But Automobile Association motoring affairs manager Mike Noon said their parent companies stood to gain big windfalls as owners of oil reserves.


COPING WITH PETROL PRICES

The Herald asked Auckland motorists how the increases are affecting them:

* Dorothy Vinicombe, 46, book promotions manager, Castor Bay

We are noticing the difference in what we have to spend at the end of the week. As a parent of three kids, I've started thinking more about the cost of taking the kids to their sports games.

* Rebecca Wang, 23, travel consultant, Glenfield

I drive less now than I did before because of the cost of petrol. I used to drive every day but now I sometimes take the bus. I also stay at home more and try not to travel too far.

* Candice Magee, 45, caregiver, central Auckland

I split my time between Peria in the Far North and Auckland City. Gone are the days of the Sunday drive. We live on one wage and it costs $104 to fill up our car. I've been looking through the papers for an economical car. We definitely stay in more now.

* Jeremy Bioletti, 45, barrister, Mt Eden

I haven't changed my lifestyle much. We were running two cars but we recently moved closer to the city, which is much easier. It costs only $1.50 to catch the bus and you don't have to worry about parking.