Petrol soars to highest price in three years

Petrol prices are on the rise again - and to levels we haven't seen in three years.

The main port price of petrol - that is, the weekly average of retail prices in Auckland, Hamilton, Wellington and Christchurch - now sits at $2.129, according to the Ministry of Business, Innovation and Employment.

That's the highest it's been since November 2014, and signifies a rise of 9 cents a litre in just eight days. The highest main port price ever was $2.269 in 2013, according to the AA.

AA principal advisor on regulations Mark Stockdale says while there's been a significant surge in petrol price of 10c in the last fortnight, they've "certainly seen increases like that in the past".

He said this one has been caused by a "double whammy" of a drop in the exchange rate of 7 cents following the establishment of a new Government, and the rise of commodity prices.

"That's hit New Zealanders doubly hard," Mr Stockdale said.

"If only one of thing's happened the prices would not have gone up by as much, but when you have both the exchange rate falling and commodity prices rising, it is a double whammy. That's why it looks so bad."

Mr Stockdale said while things appear as though they may improve soon, it is almost impossible to predict - especially when there's two variables.

"It's crystal ball-gazing, no one can say. Certainly with the exchange rate, we don't know what's going to happen there - but it's been stable for over a week, which is promising," Mr Stockdale explained.

"So maybe there's good news there, but commodity prices have gone up … so the question there is, will they continue to go up, or will they stabilise?"

BP and Z Energy have both credited the exchange rate and commodity prices as the rationale behind their decision, with the former saying it is simply responding to the barrel price rising to its highest point in two years.

"When the New Zealand dollar is weaker against the US it costs us more Kiwi dollars to buy the same volume. So there is a double impact here - steadily rising international crude oil and refined fuel prices and a weaker NZ dollar both putting upward pressure on prices."

Gull has bucked the trend somewhat, announcing on Tuesday that it wouldn't follow the other fuel giants by increasing its petrol prices for a third time in the last week.

"While the dollar has been slowly dropping over the last couple of weeks, we feel that this latest fuel price increase is a manifestation of the oil giants hedging their bets that it will continue to drop further," spokesperson Mike Williamson said.

Mr Williamson said Gull holds "a little more optimism" about the financial climate, and will re-evaluate its pricing later this week.


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