Petrol prices could reach $3 a litre - transport expert

Petrol prices could reach $3 a litre - transport expert
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A transport expert is warning that New Zealand petrol prices could reach $3 a litre within six months.

Road Transport Forum New Zealand chief executive Ken Shirley told 1 News it's "not inconceivable" given the international market.

"Given the instability we've got globally, we could expect that within six months, within 12 months," Mr Shirley told 1 News.

"But it is highly unpredictable."

Currently petrol in New Zealand is above $2.10 a litre.

In April, the Ministry of Business, Innovation and Employment (MBIA) told Newshub that New Zealand's isolation doesn't protect us from global prices.

"We buy our oil and oil products in a global marketplace, which means we are exposed (like everyone) to global oil prices," a MBIE spokesperson said.

"A regional conflict can result in global price movements, as can a regional severe weather event like Hurricane Katrina."

On Monday (local time) United States Secretary of State Mike Pompeo vowed to impose the "strongest sanctions in history" on Iran. He said the Islamic country will be "battling to keep its economy alive" when the sanctions are introduced.

Mr Pompeo did not specify when the new measures will be imposed, but a report by the BBC says the sanctions are subject to three-month and six-month "wind-down" periods.

Iran produces 4 percent of worldwide oil supplies. Khalid al-Falih, the energy minister for Saudi Arabia - the world's biggest oil exporter - said it is working to address any gap in petrol output which may arise.

"[Saudi Arabia will] work closely with major Opec, non-Opec producers and with key consumers to mitigate the effects of any supply shortages," Mr al-Falih said in a tweet.

The Iran nuclear deal is a factor, Mr Shirley told 1 News, warning it could "create quite the shock in global prices".

Instability in the Middle East has already hiked petrol prices in the UK, with British motorists paying more to fill up than they have since 2014, the Guardian reports.

Newshub.