Record-high fuel prices in the capital are expected to fall with the addition of a new, cheaper fuel company entering the market next year.
Hamilton-based Waitomo has received resource consent for a new unmanned 6-pump site in Pipitea.
The AA's petrol prices spokesman Mark Stockdale says this will result in lower fuel prices in Wellington.
"They are a low-cost brand, with lower overheads because they operate unmanned stations."
He says this will work to drive the price of petrol down as other companies try to remain competitive and match their prices.
Waitomo is expanding into Wellington early next year to deliver "much-needed competition to the capital," Cheif Executive Jimmy Ormsby says.
Wellington petrol prices are some of the highest in New Zealand – some petrol stations are charging close to $2.50 a litre.
Ormsby is planning on "disrupting the Wellington fuel market."
He says if the company's station was open today, there would be a 20-30c a litre differential between Waitomo's prices and that of incumbent Wellington petrol companies.
Waitomo has lower overheads than other petrol companies, as their sites are unmanned and, according to Ormsby, they buy their fuel in bulk.
The move to Wellington will provide some "relief" to motorists who have been "hurting at the pump," he says.
Although Ormsby is not sure how his soon-to-be Wellington competition will respond to Waitomo's cheaper prices, Stockdale thinks it will have a knock-on effect on other petrol companies.
"There is no question wherever they open, they will be charging a lower price than we're used to seeing."
He says the petrol companies in that area will be forced to match Waitomo's price but, as it's only one station at the moment, that effect may be limited.
Commerce and Consumer Affairs Minister Kris Faafoi says he hopes Waitomo's entrance into the market will help bring down prices.
"If they're of a mind to go into markets where consumers have issues with the cost of petrol, then competition is a good thing."
National's Energy Spokesman Jonathan Young is welcoming Waitomo's move into the Wellington market but says Kiwis can't "live in hope" that competition in the fuel market will increase enough around the country to alleviate record high fuel prices.
Ormsby says the company could expand into the South Island, if that opportunity presents itself.
"If there is an appetite in the South Island for what Waitomo brings to the market, then we will definitely have a look at it."