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PetrolWatch - February 2006

8 March 2006

PetrolWatch - February 2006

The rise and rise of diesel

Petrol prices fell and rose three times during February, ultimately ending up at the same price at the end of the month as in late January. While motorists did get some relief during February, with 91 octane dropping to $1.419 per litre, it soon returned to $1.479.

"The latest price increases are a combination of rising product prices, and a falling New Zealand dollar," says Mike Noon, AA General Manager of Motoring Affairs.

"We remain concerned that the forward outlook is for the New Zealand dollar to fall against the United States dollar and this will drive further petrol price increases. Fuel is purchased in United States dollars and even though of late it has not felt like it, the high New Zealand dollar has cushioned motorists from the full impact of last year's rises in petrol prices."

"Unlike petrol, the price of diesel stubbornly refused to fall from $1.059 per litre in most centres during much of February. The price then rose by up to 3 cents in the last week to close at $1.089 around much of the country - the highest recorded price for diesel."

Since the beginning of January, petrol has risen 9 cents per litre, yet diesel has risen 16 cents per litre in the same period to the end of February, according to AA PetrolWatch.

"The common perception is that diesel vehicles are cheaper to run than their petrol equivalents, but for many motorists this may not be so," says Mr Noon.

"Given current fuel prices, the cost of running a new petrol car with fuel consumption of 10 kilometres per litre is as little as $1.00 more per 1,000 kilometres than an equivalent diesel vehicle.

"While diesels are typically more economical than equivalent petrol vehicles, this saving won't necessarily offset the increased servicing costs an older diesel will incur. The days of cheaper diesel running costs compared to petrol are probably over for some motorists driving older diesel vehicles."

"Later this year the AA will be publishing the latest running cost comparisons to help prospective new car buyers make the most cost-effective choice between diesel and petrol," says Mr Noon.

Change up and save fuel
The AA encourages motorists to make simple adjustments to their driving style to help reduce their fuel consumption, and therefore offset some of the impact of recent price increases.

"Ensuring the car is in the highest appropriate gear, with the engine at moderate revs, is one simple method of cutting fuel costs. Driving at 60 kilometres per hour in third gear uses up to 25 per cent more fuel than in fifth gear," says Mr Noon.

More helpful tips on keeping your fuel costs down are listed on the AA's website:


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