Thu. Sep 21st, 2023
    Retail Petrol Prices Expected to Reach $3.50 a Litre by Christmas

    Retail petrol prices in New Zealand are projected to rise to as much as $3.50 per litre for 91 octane by Christmas. The increase in prices can be attributed to the rising oil prices and a weak New Zealand dollar. As of now, the New Zealand dollar is trading around 59.2 US cents, and the anticipation of the US Federal Reserve’s announcement on interest rates is adding further pressure to petrol prices.

    The closure of the Marsden Refinery has also contributed to the surge in fuel prices. Unprocessed Brent crude prices have reached US$95 a barrel overnight. This is the highest level seen throughout the year. Terry Collins, the AA principal motoring affairs policy advisor, warns that premium grades are already selling for over $3.50 in some areas, with the average price of 91 octane nearing $3.12. Collins predicts that these prices could rise beyond $3.20 within a fortnight and potentially reach close to $3.50 by Christmas.

    The supply deficit in the oil market is expected to persist during the last quarter of the year. Major oil producers such as Saudi Arabia and Russia have extended their supply cuts, while others in the OPEC+ group are also reducing output. In addition to this, refining costs are increasing due to limited global capacity, which will impact the production of aviation fuel. Consequently, air travel costs are unlikely to decrease, despite the rise in fuel prices.

    It is important to note that the fuel tax and full-priced public transport fares were reinstated on July 1st. The government initially reduced fuel excise duty and road user charges by 25 cents a litre in March 2022 to ease the financial strain caused by the volatile global fuel market and the cost of living pressures. However, this reduction has now ended in 2023.

    – AA principal motoring affairs policy advisor Terry Collins.