Petrol prices tipped to move higher over the coming week

AA senior policy adviser Terry Collins, said there's more pricing pain coming for motorists, as the jump in Crude Oil prices flows through to pump prices.
AA senior policy adviser Terry Collins, said there's more pricing pain coming for motorists, as the jump in Crude Oil prices flows through to pump prices. Photo credit: Getty Images.

Petrol prices nationally are tipped to move higher over the coming week, causing motorists more pain at the pump.

It comes as the price of Brent crude oil jumped US$9.41 in one day, from US$105 on Wednesday, to US $114 on Thursday.

According to fuel price tracking app Gaspy on Thursday, Auckland prices for 91 octane start from $2.66 per litre.  But prices are already moving past the $3 per litre mark at many petrol stations, their prices ranging from $3 to $3.03 per litre.

As sanctions following Russia's invasion of Ukraine hamper Russian oil exports, driving up the price of Brent crude oil, AA policy adviser Terry Collins told Newshub price rises are likely over the coming week.

Referring to landing prices over the last week as the highest seen in seven-to-eight years, Collins said New Zealand motorists are yet to see the full impact of prices coming through.

The 9 percent increase in the price of Brent crude oil is a significant jump, and "it's got to flow through to the pump".

"We're seeing barrel prices down from around $92 are jumping way over $105 and going upwards from there," Collins said.

"Fuel prices are going to be more expensive next week than they are this week."

Asked about petrol prices across Z energy stations (including Caltex), a Z spokesperson told Newshub the price paid for Brent crude oil (and refined petrol and diesel) and shipment to New Zealand, makes up around 43 percent of the cost of one litre of petrol.

As fuel is purchased in US dollars, pump prices also reflect the value of the New Zealand Dollar against the US Dollar.

"Following the surge in the cost of crude overnight - largely driven by the geopolitical situation in the Ukraine - we are beginning to see that increase reflected at the pump," the Z spokesperson said.

Motorists will notice prices at Z stations can differ by region - even within the same town. This was due to overhead costs and/or local competition.

Confirming there's been a general increase in supply prices, Gull retail operations manager Mike Turner, said prices for higher grades of petrol (95, 98 - and 91 in some areas) were pushing $3 per litre.

He said Gulls' low service model, which includes unmanned stations, allows it to absorb some of the cost shock.

"We're still running our discount days and mid-week specials..but like everyone else, we're not immune to it," Turner said.

Climbing pump prices are largely due to the price of global crude oil, currently at record-highs, geo-political factors and pandemic interruptions, a Government spokesperson said.

Globally, crude oil prices have risen from a low of $US17.55 a barrel (NZ$29.33) in April 2020, to $US90.9 (NZ$136.5), in the week ending February 25, 2022 - the highest Dubai crude oil price since October 2014.

"These factors are largely outside Government influence, although yesterday in response to the Ukraine conflict, New Zealand, a member of the International Energy Agency, took steps to support global action to ease pressure on global fuel prices by agreeing to contribute to a voluntary release of 60 million barrels of oil from global emergency stocks held by IEA members to ease uncertainty in the market," the Government spokesperson said.

"A process is now underway to determine what voluntary contributions member countries can make."

As petrol prices move higher, AA policy adviser Terry Collins suggests price-conscious motorists may find prices are more competitive in areas where there's a higher number of petrol stations, and at stations offering a  'no frills' service.