AA Petrol Watch June 2004

10 June 2004

AA Petrol Watch June 2004

AA Petrol Watch observed that fuel prices increased significantly at the pump during the month of May to reach record highs. These price increases reflected an increase in the international price of oil and further fluctuations in the exchange rate.

The nation-wide average price of 91 Octane increased by 10 cents throughout May from 113.5 cents per litre at the start of the month to reach 123.5 cents per litre by the end of the month. The price of 96 Octane also increased by a similar margin. The importer margin for petrol ranged between 12 and 13.5 cents per litre.

Diesel also rose throughout May reaching a nation-wide average price of 79.5 cents per litre in the last week of the month. The average price in the last week of April had been 68.5 cents per litre.

The Association today noted that current high pump prices reflect short-term uncertainty in international oil markets because of concerns about security of supply, rather than any long-term reduction in world oil supplies, as some pessimists seem to think.

“Motorists will be expecting retailers to quickly reduce their pump prices when the international price of oil decreases, especially given New Zealand’s continuing high exchange rate” Jayne Gale, AA Motoring Policy Manager said today.

The Association also called on the Government to reconsider its taxation of petrol, which currently amounts to 55 cents on each litre of petrol sold (including GST).

“The Government, with its considerable surplus, has the ability to ease the burden of high fuel prices on households and businesses by reducing the petrol tax and also has the option of diverting increased taxation revenue collected as a result of higher petrol prices into better and safer transport infrastructure” Ms Gale said.

ENDS

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