Why fuel prices could be about to rocket for New Zealand motorists

There are fears fuel prices could keep rising for New Zealanders as we head into the cold season.

As of last Friday, 91 octane is now at $2.369 while diesel is at $1.739. This is the highest petrol price since last October.

"They just seem to keep going up," says AA spokesperson Mark Stockdale. "We've just had 13 prices rises since the start of the year."

Part of the current rise is due the seasonal trend in commodity prices, where prices tend to be higher during our winter period. But at the same time, geopolitical tensions are pushing prices higher around the world.

The Trump administration said it would end waivers for Iran's oil buyers in an effort to sink Iran's oil exports to zero.

In return, Iran has warned that it could close the Strait of Hormuz, a key strategic regional waterway used to transport around one-fifth of the world's oil.

There are also fears of supply cuts in Libya, a major oil-producing country, since Libyan National Army leader Khalifa Haftar marched on Tripoli and took control of the Libyan crude oil supply.

And the Organization of the Petroleum Exporting Countries (OPEC) has decided to cut back on production.

OPEC countries, which include Iran, Saudi Arabia and Iraq, account for nearly half the world's oil production. When they cut supply, it drives prices up.

"For them, high oil prices means they have more revenue," economist Shamubeel Eaqub told The AM Show last Friday.

Because far-flung New Zealand is so dependent on imports, our falling dollar is also a problem.

"The New Zealand dollar has come back a little bit. Late last year the currency was about 70c, now it's about 65c against the US. As the New Zealand dollar falls, it makes our imports more expensive," Eaqub says.

The AA warns these factors are all boosting oil prices and inflation, hitting Kiwi motorists in the pocket.

"What we understand is the Iran sanctions are having an impact and also conflict in Libya is having an impact," Stockdale says.

"Predictions around the reduction in supply tends to lead to higher prices."

Stockdale says this will be concerning to motorists, as prices are now above where they were at the same time last year. Petrol prices ended up topping out near $2.50.

"Our advice is to shop around and have a look for those low-cost unmanned service stations," he says.

"Also download the Gasp app that lists prices around New Zealand. That's a good way to search where the lowest prices are in the area you live.

"Take advantage of the various loyalty discounts the major brands offer or supermarket dockets. Also get on their email lists and sign up to loyalty discounts because they will email out when they're having specials."