Petrol prices could skyrocket to $3 a litre after Saudi Arabia attacks

The worst case scenario is that petrol could hit $3 a litre, an economist warns.

New Zealand petrol prices could reach a nightmare $3 a litre following the attacks on Saudi Arabia's oil facilities, an economist says.

However, the true impact the explosions would have on the oil industry remains to be seen.

As of Monday morning, the "horror scenario" at this stage would see fuel prices reach $3 at the pump, economist Cameron Bagrie told MediaWorks.

"If you look at the imported component of the petrol prices, it's about 75 cents.

"Let's keep the maths simple, let's say that oil prices basically double, that imported component will go from 75c to $1.50."

However Z Energy chief executive Mike Bennetts said today that if the impact of the attacks was only felt short term then the outlook was promising.

"Oil in storage is quite high at the moment, so if this was to go on for a week or so it could be easily managed," he told Mike Hosking Breakfast on Newstalk ZB.

"If it's say a short term disruption, it's probably worth up to $5 a barrel, or about 5 cents a litre at the pump.

"If it's a more long term disruption, we could be looking at something around $10 a barrel, or 10 cents a litre."

The worst case scenario is that petrol could hit $3 a litre, an economist warns.

A reduction in the supply of oil could have a negative impact on commodity prices, which could result in higher prices at the pump.

The attacks were not a great sign but New Zealand would have to wait to hear what impact they might have on fuel prices, AA spokesman Mark Stockdale said.

"It's difficult to know what's going to happen."

The impact the attacks will have on New Zealand remains to be seen. Photo / AP

Meanwhile, Bennetts said in his experience markets tended to overshoot and when it came to bad news, they thought it was "really bad news".

Asked what impact the attacks would have, Bennetts said, "I don't know, as you can appreciate it's taken place over the weekend.

"Oil markets will open later today, it all depends on what information we get."

Elsewhere, jet fuel prices could increase if there was an increase in the cost of crude oil, potentially leading to an increase in fares.

Fuel made up at least 25 per cent of airlines' operating costs and jet fuel was now at US$77 a barrel, nearing the top of the range for carriers to hold prices.

This year, Air New Zealand expected to spend $1.3 billion on fuel, based on an average jet fuel price of US$75 a barrel.

A Government spokesman said there would be no comment on the drone strikes in Saudi Arabia until today.