Z London St was selling 91 Unleaded for $2.71 on Friday, February 4. Photo / Bevan Conley
Z London St was selling 91 Unleaded for $2.71 on Friday, February 4. Photo / Bevan Conley
Petrol prices in Whanganui are currently higher than in neighbouring cities, which an expert says is down to a lack of competition in the River City.
AA fuel prices spokesman Terry Collins said according to the Gaspy fuel spy app, the cheapest price for 91 Unleaded in Whanganui on Fridaymorning was still around 10 cents per litre more than the lowest in Palmerston North and New Plymouth.
The main reason for that was the number of outlets in each centre.
There are 12 in Whanganui city, 19 in New Plymouth and 32 in Palmerston North.
"Low-cost, 'no-frills' options, like NPD, Waitomo or Gull, have the tiniest margins and they can afford to sell cheaper," Collins said.
New Plymouth and Palmerston North offer more "no-frills" services.
The Gull station in Whanganui's Victoria Ave had the lowest price ($2.55 per litre) on Friday morning while Z London St was the highest ($2.71).
In Palmerston North, petrol at the NPD self-service station in Rangitikei St was $2.39 per litre. The Gull petrol station on Tremaine Ave was selling 91 for $2.42.
"What we see in some rural areas is that petrol is cheaper because of the connection that service station will have with the community, and it's prepared to take a lower margin because it knows everybody in that community," Collins said.
"It doesn't want to take that 'I'll charge you as much as I can' philosophy."
A BP Connect spokesperson said a number of factors went into fuel pricing.
"We review BP Connect prices every day to ensure competitiveness in the market."
AA fuel prices spokesmanTerry Collins says smaller fuel companies are helping to keep prices down in some parts of the country. Photo / Supplied
NPD was currently expanding operations through the South Island, but he didn't know if the company would open a station in Whanganui, Collins said.
"Allied, for example, has a strategic advantage when it got into fuel because it's a logistics company.
"They've got warehouses and depots and things like that, so all it was for them was just another product. They could build the stations and they would look after themselves.
"There are all these little operators out there that are helping to sustain a lower price. Without them, I suspect the prices would be even higher."
Whanganui catering company Jamie's Angels currently delivers 550 meals to local residents each week.
A spokesman said increasing fuel prices did affect operations.
"Maintaining an equality of food and keeping costs down is a struggle."
He said the lack of competition between fuel companies applied to other sectors as well.
"That's the biggest thing here in New Zealand.
"You've got Fletcher tying up building and you've got the two main supermarkets tying up the food chain.
"You take it because you have to. We deliver meals to the elderly, so I can't pass that [price] on."
Collins said there were other parts of the country experiencing higher fuel prices in comparison to neighbouring centres.
"You are not alone in that one.
"Taupo is one, as is Hawke's Bay. Every time I look at it there's not as many service stations in that area, and there are not as many low-cost operators."
A price tag of $3 per litre for some grades of fuel was now in effect in certain parts of the country, Collins said.
"We hit $3 for 95 in one of the service stations in Wellington yesterday, and I'm seeing $3.05 for 98 in places as well.
"As for 91, there will be places selling it for $2.90-something. We are getting very close to that hot-point."
BP Connect on London St. Photo / Bevan Conley
The $3 price tag made anything less than that seem like a good result, the Jamie's Angels spokesman said.
"Then when it's $2.50 and $2.70, we say thank you.
"Kiwis are very resilient though.
"If it was in any European countries there would be riots on the streets by now but Kiwis, bless them, just get on with it. That's the reason I like living here.
"All our customers are coping and hoping."
A spokesperson for Z New Zealand said fuel pricing was "localised".
"What this means in practice is that prices can be different at service stations within regions or even the same towns based on a range of factors such as varying property overhead costs or local competition.
"At Z, the prices are set by head office, not by the individual service stations.
"The range of prices across the country remain similar to previous years and we continue to price in a market that operates several different company structures so the return for each competitor is different."
However, discount programmes such as Pumped and Z Business were available.
"We encourage customers to take advantage of that."
