Lack of competition driving up fuel prices, but there's hope in sight - financial advisor

New Zealand's fuel market is at the mercy of a small group of owners, financial advisor Sam Stubbs says.

According to the AA, a litre of 91 octane cost $2.28 as of May 30. That's up from the $2.15 a litre it cost three months ago.

Stubbs, who is currently the managing director of Simplicity KiwiSaver, told The AM Show New Zealand's petrol market is dominated by Z Energy.

Z Energy owns Chevron, which owns Caltex and holds a 15.4 percent stake in Refining NZ, which operates New Zealand's only oil refinery.

"There's nothing Z are doing with the other petrol companies to necessarily jack up the price of petrol, but when you have one dominant player they tend to set the price," Stubbs said.

A Z Energy spokesperson told Newshub the company was part of a large number of companies involved in the New Zealand market.

"Whilst Z is a large and significant player in the market, pricing for retail fuel occurs in a hyper-local way.

"It is the local competition (regardless of size of competitor) which largely determines the price in each local market. Z sets the price at 204 service stations across New Zealand out of a total of nearly 1500, across 20 other retail brands."

The spokesperson said the company aims to offer a more full service option, while some other stations offer cheaper "no frills" services.

Low-cost players like Gull and Waitomo offer such services, including fully unmanned stations, and are slowly making their way down the country.

"We haven't had real competition and we're starting to see it with companies like Gull and Waitomo, what they're doing is they're importing petrol directly from offshore and selling it here," Stubbs said.

"We've got some pretty good competition in places like Auckland, it tends to be North Island dominated, but you haven't got Gull or Waitomo in the South Island yet.

Gull recently announced it would be opening a station in the South Island town of Maheno in July, while Waitomo recently opened its southernmost station in Upper Hutt in May.

Stubbs said the effect of a low-cost station opening is felt pretty quickly in the surrounding areas.

"I live close to a petrol station that was I think the second most expensive in the country, as soon as Gull even announced they were coming and then built the station suddenly the prices dropped.

"So competition really works in this space and if a Government has a single role to play here they have to really encourage competition."

Z Energy has been contacted for comment.

Newshub.