Petrol prices fall, further drops likely

Unleaded 91 is as low as $2.40/litre in some areas.
Unleaded 91 is as low as $2.40/litre in some areas. Photo credit: Getty/file

Fuel prices fell during May as global supply increased, and the New Zealand Automobile Association (AA) said further short-term relief could be on the way for motorists.

Figures from fuel price database Gaspy showed the average price for unleaded 91 on Friday is $2.66 per litre, down 21.27 cents or 7.4 percent from 28 days ago.

The lowest prices for 91 are in Manawatu-Wanganui, Bay of Plenty and Hawke's Bay, with New World Marton cheapest at $2.41/L.

This comes after 91 rose 26 cents/L from the beginning of the year to April.

The average price of diesel is $1.99 per litre today, down 14.73 cents or 6.9 percent over the last 28 days.

AA fuel prices spokesperson Terry Collins said a mixture of international and domestic factors were responsible.

Globally, increased supply has lowered oil prices to US$78 (NZ$125.85) per barrel, up from a 2024 high of US$91.17 (NZ$147.11) in April.

In addition, the Organisation of the Petroleum Exporting Countries (OPEC) announced it was planning to end some voluntary output cuts gradually, beginning in September.

"In other words, they are putting more fuel back onto the market," Collins said.

The New Zealand dollar also strengthened in May.

Domestically, Collins said the low price of carbon is also keeping fuel prices down.

"The Emissions Trading Scheme is at the lowest level we've seen for some time," he said.

After peaking at $73.95/tonne in February, it is currently at $54.

"That's taken about 4 cents off per litre."

Collins said there could be further price drops to come, because the current oil price is for the next month's contracts, whereas the current month's supply was purchased at a higher rate.

Major geopolitical events like the Israel-Hamas conflict and Red Sea attacks are impacting the market, but only in the short term.

"It's a little bit of a lumpy old ride."