Drivers in the South Island are being pillaged by petrol companies and it has gone beyond being acceptable, the Queenstown Lakes mayor says.

And there is no let-up in sight as the AA predicts more increases.

Prices for 91 octane petrol in Wanaka reached $2.509 a litre yesterday at BP and Caltex.

Queenstown Lakes Mayor Jim Boult said distance could not be used as an excuse.


"I think the remoteness of our region is overplayed when it comes to the cost of distribution here and frankly it's just getting beyond an acceptable level."

He did not think it would affect tourism, as visitors to other countries usually just paid what was asked and likely did not think too much about it, other than the fact it seemed expensive.

"I'm more concerned about locals.

"I don't think it needs to be as high as it is.

"I'm afraid I think there's a fair amount of ... pillage by the petrol companies here."

Around the rest of the region, Dunedin's BP, Caltex and Z Energy stations were charging $2.359, while Invercargill's Z Energy was charging $2.379.

Oamaru had some of the cheapest petrol in Otago and Southland - $2.329 at its BP and Caltex.

AA petrol pricing spokesman Mark Stockdale said the prices were the highest motorists would have seen, except in some very remote places.

"We've never paid this much at the pump before."

And costs would only increase, as motorists were set for another price hike at the end of the month with the Government's 3.5c per litre petrol excise duty rise.

"That will push [main centre] prices for 91 octane [to] just under $2.40 a litre."

The cost was something fuel companies needed to explain.

Petrol companies were not being open about reasons behind higher prices in places like Wanaka, suggesting they were "hiding something", Mr Stockdale said.

Source: ODT
Source: ODT

Managers at Wanaka's BP and Caltex declined to comment.

BP spokeswoman Leigh Taylor said the company reviewed its prices daily and was aware of the strain high prices put on motorists.

"Recently that's been due to the cost of product rising and changes in interest rates."

The Wanaka BP site was locally owned so its price was not set by the company, she said.

She agreed BP would have to "reassess" prices when the Government's petrol duty increase was introduced.

"The price increases are largely out of our control."

A Z Energy spokesman said its prices were based on international oil prices.

"Prices are set based on international oil prices, the strength of the New Zealand dollar against the United States dollar, because we buy oil in US dollars, and local competition," he said.

"Crude oil and refined products like petrol and diesel are all internationally traded commodities.

"Barrel prices are really high at the moment and increased at the start of this week.

"This, along with a low key dollar, is why the price at the pump has gone up."

Mobil Oil New Zealand lead country manager Andrew McNaught, said the New Zealand petroleum market was becoming increasingly competitive, hence the high prices.

"Mobil's fuel prices are influenced by a number of factors, including excise duties and taxes, product costs, exchange rates, transportation, retailing costs and local market competition," Mr McNaught said.

"Setting retail prices is thus a balancing act between the immediate effects and influences of the market, versus the longer-term outlook for our business and the industry."