New Zealand petrol prices plummet as crude oil sinks

Petrol prices have continued to plummet in New Zealand, with Z Energy slashing 7 cents per litre at most of its Caltex and Z retail service stations on Tuesday.

"Yesterday, we put our prices down by up to 6c per litre across 90 percent of our sites," Z Energy said in a statement.

"This morning, we've responded by putting down prices a further 7 cents per litre across our entire network."

There's been a sharp decline in Chinese crude oil consumption as the COVID-19 outbreak causes shutdowns and transportation cuts.

Russia and OPEC were working on a plan to address the collapse in oil demand, but failure to agree prompted Saudi Arabia to slash the price of its crude oil and increase oil production.

The price of Brent crude dipped 22 percent to US$35 a barrel on Monday, putting it on track to its worst day since the first Iraq war in 1991. Prices had been as high as US$65 a barrel in January.

Hedge fund investor and co-founder of the Merchant Commodity Fund Doug King says the price war "is going to get nasty".

"OPEC+ is going to pump more, and the world is facing a demand shock. $30 oil is possible," he told Bloomberg.

Across the ditch, CommSec chief economist Craig James predicts Aussie motorists could see prices as low as around $1 per litre.

"The ready-reckoner is that every US$1 a barrel fall in the oil price leads to a 1.0 cent fall at the petrol bowser," he wrote in a research note.

"Provided the Aussie dollar is reasonably stable, motorists may be able to look forward to filling up for near $1 a litre."

In New Zealand, petrol prices have fallen by 16c a litre since the start of the year and this trend is expected to continue.