Big variations in South Island petrol prices unexplained by big companies

The reason southern drivers face a bewildering range of petrol prices has been only partially explained as the price reached record figures in the past week.

Wanaka recorded the highest price the Otago Daily Times found, at $2.44 a litre at some service stations, but another nearby was 18c cheaper at $2.26.

But despite the level of competition, Consumer NZ is calling for Government intervention to allow an investigation of a market where dominant firms "may be taking advantage".

Major oil companies have been less than forthcoming on the reasons behind their pricing this week.

Z Energy's website says the company is "committed to being straight-up with journalists and the media".

"That means providing meaningful information, giving straight answers and setting new standards of transparency in our industry."

Neither of the company's two communications spokeswomen, Sheena Thomas and Georgina Ball, returned calls from the ODT over the past two days.

BP spokeswoman Leigh Taylor said BP sites in Invercargill, which have lower prices of around $2.18, and Wanaka were independently owned and operated and set their own prices, so she could not comment on their pricing.

She suggested calling owners.

But those that could be contacted told the newspaper they could not speak to the media; one said his contract stipulated he could not do so.

Both suggested contacting BP.

Consumer NZ head of research Jessica Wilson said the petrol market was dominated by "a few big players".

"This type of concentration brings with it inevitable risks that consumers will pay higher prices for products."

Consumer NZ wanted the Commerce Commission to have greater powers to investigate the market and compel fuel companies to provide information on their pricing.

"Competition authorities in other countries already have similar powers.

"The case for them here is even stronger, given the concentrated nature of our market."

Competition laws needed to allow regulators to intervene where dominant firms may be taking advantage of their market power to the detriment of consumers.

Automobile Association petrol pricing spokesman Mark Stockdale said market forces were behind the range of prices.

"Clearly the difference in price is nothing to do with the product, or the cost of the product, because it's the same product from the same source."

The difference was in competition, but also in what the different outlets offered. Some were unmanned and all that was on offer was fuel, while others had a shop and toilet and coffee.

"You pay for all of those things."

Higher petrol prices were a trade-off, as those businesses offered something else a consumer might want.

Stockdale said more remote parts of New Zealand had always had higher fuel prices.
Queenstown and Wanaka fell into that category, being hundreds of kilometres from the port in Dunedin, requiring a return journey by a fuel tanker.

The populations in those areas were also lower, meaning there were still overheads but possibly lower turnover, and the cost of living was higher.

Whether prices paid were fair, "that I can't say".

In Wanaka, the self-service McKeown outlet was charging $2.26 this week.

McKeown managing director Ken McKeown, whose company is building a self-service outlet in Dunedin, said his company was "not as hungry as the other ones".

"We operate a bit thinner than other companies, I guess."

Asked if consumers were well served by competition in the south, he said: "If they shop around they are.

"We're giving them a fair deal."