Commerce Commission confirms NZ petrol prices fast to rise but slow to drop

It's something eagle-eyed drivers all over New Zealand have long suspected: petrol prices are very quick to rise, but slow to fall.

One motorist visiting the famously cheaper unstaffed Caltex on Auckland's Newton Road told Newshub an increase in international oil prices doesn't take much time to get here, but a reduction "is a little bit slower than expected".

Now, for the very first time, the Commerce Commission has proved that effect. It's been closely following fuel prices, and says when the international oil price goes up, prices at the pump are quick to follow. But when they fall, the price we pay is slower to drop.

"Typically it takes prices a week or two longer to come down in response to a cost decrease, than it does when they go up," Commissioner Bryan Chapple said.

The Commission believes that delay means we're collectively overpaying for fuel by about $15 million a year.

Chapple said it's a clear sign competition between companies is not as strong as it could be.

"That's not what we are seeing here. If we were seeing that here, you wouldn't be able to take just a bit of extra time to let prices come down."

The AA believes this research has been cleverly released just ahead of what should be a price drop for Auckland, when the Regional Fuel Tax there is removed from 11:59pm on June 30.

AA principal policy advisor Terry Collins said the Commission "kind of put a shot across the bows of the industry to say - we know that this is coming down 11.5 cents".

"The fuel companies have shown by their capacity to put the prices up quickly they also have the capacity to put the prices down quickly," he said.

Chapple said: "We've been very clear we'll be looking to see the full decrease passed through straight away."

Waitomo and Z Energy have both confirmed to Newshub they intend to do just that; pass on the full saving from the Auckland Regional Fuel Tax the second that it lifts.

The Commission, though, emphasises that increasing competition is a process, and Kiwi consumers can help strengthen it by shopping around for fuel and rewarding the lower-cost operators, who tend to drag prices down for everyone in the areas they operate.

Their top tips to get the best price?

"Don't be fooled by discounts, look for the lowest net price. Look up the best price in your area by using the Gaspy app," Chapple said.

"And use unstaffed but non-supermarket stations, because our research has shown that those are on average 6 cents a litre cheaper."

The Commission also said it will be further monitoring prices and releasing regular data and research so that it can empower Kiwis to choose the cheapest provider.