KEY POINTS:
Petrol is likely to be more expensive for the Labour Day holiday weekend as oil companies react to new fears of turmoil in the Middle East.
BP yesterday lifted its price by 3c a litre.
Other major suppliers said they would be looking hard at their rising costs
today, having already lifted their petrol prices 5c a litre at main-centre pumps on Friday.
International crude oil prices have risen more than 10 per cent in six days because of fears that supplies could be disrupted if Turkey sends forces into northern Iraq against Kurdish militants operating on its borders.
Turkey's parliament gave its troops permission overnight to enter northern Iraq to fight Kurdish rebels.
Early this morning the price for a barrel of crude hit US$89, only US$1 short of its record high in 1980. It later fell back to US$87.40.
BP Oil NZ spokeswoman Diana Stretch said the company was now charging 163.9c a litre for 91-octane petrol, 168.9c for 95-octane and 116.9c for diesel.
She blamed a drop in the NZ dollar and international price rises.
"We have seen a 6 per cent increase in the cost of product since Friday."
Ms Stretch could not guarantee the price would not go up again before the weekend, but said New Zealand retailers had reduced petrol prices by 8c a litre this month.
Industry minnow Gull Petroleum held back on increasing its prices last week, saying rises were premature.
Gull regional manager Dave Bodger said yesterday other companies had dropped their prices at some petrol stations to match Gull.
"We hope to hold the price through to the holiday weekend because it's such a big time for fuel usage."
Mr Bodger said events overseas had a direct effect on refined fuel prices in Singapore, which in turn affected New Zealand prices.
Caltex spokeswoman Sharon Buckland said the company would review its prices today.
"Nobody wants to put the price up before the long weekend. We don't want to inconvenience motorists. But the market is small, and we cannot command the market price."
Mobil and Shell said they would look at their pricing today.
Automobile Association spokesman Simon Lambourne last night advised motorists to "fill up as quickly as possible."
He was disappointed oil companies were considering putting up prices just before the holiday weekend and asked them to consider making an "excellent goodwill gesture".
In most years, Labour Weekend prices had dropped after a winter high.
But this time the price of crude oil was the highest New Zealand had experienced.
The AA said that in August last year, motorists paid 177c a litre for 91-octane, but as the exchange rate rose, the price dropped to 138.9c a litre in November.
The rising oil price has raised inflation fears among economists, which could in turn result in interest rate increases.
ANZ National Bank economist Cameron Bagrie said: "It's not welcome news for the Reserve Bank, because it will add to inflation pressure. And it's not welcome for households because petrol is a big item of expenditure."
