World Oil Price Hikes Have Local Impact

19 January 2001

OPEC’s decision to cut oil production by 1.5 million barrels a day is forcing BP to lift its petrol and diesel prices.

From midnight on Monday (22 January), BP will increase its wholesale petrol price by 7 cents a litre and its wholesale diesel price by 5 cents a litre.

The increase will move prices at most of the service stations owned and operated by BP to $1.06.9 for Unleaded 91, $1.11.9 for Premium Unleaded and $1.12.9 for Ultimate (BP’s new high octane, low benzene petrol). Diesel prices will rise to 74.9 cents.

BP’s Managing Director Peter Griffiths said despite pressure to move earlier as world costs surged, BP purposely chose to delay the increase until 23 January when most people would have returned from their summer holiday.

“We also want to give motorists plenty of time to fill up now before prices rise,” he said.

Mr Griffiths said it was unfortunate that volatility on the world oil market has put an end, for now, to the cheaper prices motorists enjoyed around Christmas.

On Boxing Day BP dropped petrol prices below $1 for the first time since May 2000. Motorists also reaped the benefits of two 10 cent price discount days.

The world oil markets reacted swiftly to news that OPEC was likely to cut production, pushing crude prices to their highest levels for a month.

In recent weeks, the cost of a barrel of crude oil has risen by $NZ5 to $NZ50 in anticipation of OPEC’s reduction.

Product prices (refined petrol and diesel) have also jumped. Since late December, refined petrol prices have risen by $NZ10 and refined diesel prices by $NZ5.

Mr Griffiths said further price rises cannot be ruled out if the trend of higher world oil costs continues.

He promised motorists that BP would be quick to drop its prices back down again once international pressures ease.

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