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Surging Crude/Product Costs Force Price Rise

BP Oil New Zealand Ltd is lifting the price of petrol and diesel by five cents a litre at its company-owned service stations, effective immediately.

Today’s increase takes prices at most BP company-owned service stations in the main centres to $1.039 (Unleaded 91), $1.089 (Premium Unleaded) and 67.5 cents for diesel.

The increase is due to surging crude oil costs and increases in already-refined petrol and diesel. The weak NZ dollar is also contributing to the higher costs. At current prices, BP is making net losses on the sale of every litre of fuel.

BP last increased its petrol prices by three cents on 5 May. Since then, the market for ready-made fuel has jumped from NZ$62 to NZ$69 per barrel due to high demand compounded by refinery shut-downs in the Asia Pacific region. BP imports about half of its petrol ready-refined.

Also putting pressure on BP are high crude oil costs which have risen from NZ$48 to NZ$57 per barrel since 5 May. The diesel market, which had been steady in recent months, has also jumped from NZ$52 to NZ$60 per barrel over the past fortnight.

Managing Director Peter Griffiths said high crude and ready-refined prices are worrying and frustrating, especially coming so soon after the optimism following OPEC’s March decision to increase production.

“OPEC has said it would keep oil prices within a band of $US22 - US$28 (NZ$47 - NZ$60). At the moment we are near the top of that range and it remains to be seen whether OPEC will act to offset the oil price rally by boosting production.”

The US has already begun to lobby OPEC to lift oil output. If successful, oil prices should start to drop down again.

“What this volatility on the world stage means is that New Zealand motorists are likely to see continuing fluctuations in prices at the pump for some time,” Mr Griffiths said.

ENDS

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