Motorists were feeling the pain in May, June and July… and August
Kiwis are accustomed to complaining about the amount of tax and excise levied on petrol and diesel, but things got a bit silly in the second quarter of this year.
In Auckland during May the price for 91 hit $3.15 a litre while 98 went beyond $3.40. Diesel was line-ball with petrol, meaning by the time Road User Charges were added into the calculation, the preference pendulum had swung hard toward petrol.
Then in July, after the Government extended its ‘excise holiday’ on fuel, more pain: the fuel retailers were found to be taking some rather fat margins as well, thanks to a tumble in crude oil prices.
While international crude oil prices dropped faster than pump prices and the government extended the ‘excise holiday’ it had applied in March to ease cost of living concerns, an unprecedented 60c in every litre of petrol or diesel was going to the fuel retailers as profit margin.
Even after the Government’s 25c per litre fuel excise cut, June figures showed petrol prices were up 36 percent year on year; diesel up 74 per cent.
Media noted the importance of diesel to the economy: “It fuels New Zealand’s tractors; it powers the trucks that get our produce to market; it the freight trains running”.
Prices and margins are monitored by the Ministry of Business and Innovation and consultants Hale & Twomey. Both reported that in July, margins went through the roof.
According to the MBIE data, petrol margins went from 22c to 45c a litre; diesel margins were up from 30c to 64c a litre.
An industry spokesperson said the fuel companies had to protect themselves against future price spike events. They blamed the war in Ukraine, Covid supply chain problems and other difficulties for the crippling price hikes.
The only respite came when the Commerce Commission and MBIE took a closer look at margins and voiced their concerns. Then Terry Collins, AA principal policy adviser, made the situation uncomfortable by pointing out that fuel prices only began to drop when the government highlighted the profit margin issue.
“The AA has noted that over the past few weeks there has been a big drop in the landed cost of petrol and diesel and this has not been reflected at the pump. Although some oil companies have reduced their prices there is more that can be done. The AA invites the oil companies to respond quicker to these lower landed prices and to pass on these savings to motorists who are currently hurting.”
But who actually forced the grudging downward shift that followed? It took the Commerce Commission to investigate the gap between the retail pump price and the actual cost of delivery of fuel. By mid-August even the price-drivers (traditionally BP and Z) were setting their price displays to numbers just below $3.00.
At the end of the month prices had eased slightly. In order to score the cheapest fuel, people living in Auckland faced a drive to Costco Westgate, which had 91 for $2.98. The next cheapest was NPD (Otara and Wiri), Caltex Newton, and Pak’nSave supermarkets at Lincoln Rd and Manukau (all $3.06).
The cheapest spot within 10km of Wellington CBD was Caltex Old Hutt Rd ($2.85 for 91).
In Christchurch, the cheapest fuel was at NPD and Gull on Stanmore Rd – both stocking 91 for $2.81.
The cheapest prices within 10km of central Hamilton at Pak’nSave Mill St and Gull Norton Rd – both selling 91 for $2.88.
Meanwhile, in Napier, 91 unleaded fuel costs were anywhere from $2.88 to $3.05.
The lesson? Shop around. Even better, let your fingers do the walking. The fuel price app Gaspy remains a great way to find the best price on fuel. If necessary, take a ‘splash and dash’ ten litre top-up of expensive fuel to get to a cheaper outlet.
