Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

BP Announce Petrol Price Increase

Exchange Rate, Refined Product Costs Lead To Price Increase

A massive increase in the refined (ready-to-go) cost of diesel and a decline in the value of the New Zealand dollar have forced BP to increase prices at its company-owned service stations with immediate effect. The amount of increase is 4 cents a litre on petrol and 5 cents a litre on diesel.

Both petrol and diesel have been adversely affected by the sharp decline in the value of the New Zealand dollar against the US dollar. Since BP’s last increase on August 19th, the NZ$/US$ exchange rate has fallen from $0.4521 to $0.4287. The impact of the exchange rate alone has added about NZ$4.50 to the cost of a barrel of refined petrol and NZ$5.00 to the cost of a barrel of refined diesel.

Additionally, BP’s Managing Director, Peter Griffiths, said that the price increase on diesel does not cover the massive spike in diesel costs since the beginning of August. “Early this month, refined diesel was trading at around US$31 a barrel - now its US$41. As if that’s not enough, the exchange rate has declined as well. It means that we’ve seen an increase in our costs of around 16 cents for every litre of diesel, excluding GST. The maths says we are still absorbing cost.”
Refined product costs are determined by supply and demand. Crude oil represents a major cost for a refinery - currently, crude oil is continuing to trade at high price levels, with Dubai at around US$29 a barrel.

The market for refined products continues to reflect high demand in the United States and Asia. Furthermore, refineries struggling to meet demand have reduced their stock levels to a critical point, which may lead to further cost increases.


“We don’t like increasing prices” said Mr. Griffiths. “We keep holding off price increases as long as possible, in the hope that refined product costs will decrease or the exchange rate will recover. That simply hasn’t happened - right now, all of the factors that affect our pricing decisions are working against us.”

“I’ll repeat again the promise I made at the time of our last increase - when our costs start to reduce, we will pass on the savings to our customers.”

Ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Super Fund/Canada Bid v NZTA: Tow Preferred Bidders For Auckland Light Rail

The two preferred delivery partners for Auckland light rail have been chosen and a final decision on who will build this transformational infrastructure will be made early next year, Minister of Transport Phil Twyford announced. More>>

ALSO:

9.3 Percent: Gender Pay Gap Unchanged Since 2017

“While it has remained flat since 2017, the gender pay gap has been trending down since the series began in 1998, when it was 16.2 percent,” labour market statistics manager Scott Ussher said. More>>

ALSO:

Ex-KPEX: Stuff Pulls Pin On Media Companies' Joint Ad-Buying Business

A four-way automated advertising collaboration between the country's largest media companies is being wound up after one of the four - Australian-owned Stuff - pulled the pin on its involvement as part of a strategic review of its operations ... More>>

Bus-iness: Transdev To Acquire More Auckland And Wellington Operations

Transdev Australasia today announced that it has agreed terms to acquire two bus operations in Auckland and Wellington, reaching agreement with Souter Investments to purchase Howick and Eastern Buses and Mana Coach Services. More>>

ALSO: