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PetrolWatch – August 2006

Media Release: 4 September 2006

PetrolWatch – August 2006

Motorists breathe a sigh of relief!

After months of rising prices, motorists enjoyed three consecutive drops in the price of petrol during August, totalling 15 cents per litre. Prices for 91 octane began the month on $1.77 per litre, and fell to $1.62 per litre litre by month end.

“The falling prices reflect a continuing drop in the international price for refined product, crude oil, and the steadying of the New Zealand dollar,” says AA Motoring Affairs General Manager Mike Noon.

“We are pleased that the decreases are being passed promptly onto Kiwi motorists. However, while drivers might be breathing a collective sigh of relief, we cannot be sure that the period of high prices is over, as there are still international political and supply tensions which could affect the market,” Mr Noon cautions.

There was less respite for diesel consumers in August, with prices dropping only 6 cents per litre during the month, to end on $1.22 per litre in the main centres. Despite this, diesel prices, like petrol, are now retailing at the same levels last seen in April 2006.

“Diesel consumers won’t be feeling quite as relieved, as prices have not fallen as much as petrol - thanks to high international refined prices, which are a reflection of stronger worldwide demand for this ‘fuel of industry’,” Mr Noon says.

Review of the Petroleum Products Specifications Regulations
The government has announced plans for further reductions in the level of sulphur in fuel, with sulphur in both grades of petrol being reduced from 150 to 50 parts per million (ppm) from 1 January 2008. From 1 January 2009 sulphur levels in diesel will be reduced from 50ppm to 10ppm, effectively making it 'sulphur-free'.

“The AA recognises that lower-sulphur fuels will reduce emissions and encourage the uptake of new-technology, cleaner vehicles, which is a good thing. However, this may come at a price for motorists as low-sulphur fuels cost more to refine. This is especially a concern for 91 octane, which will have a different specification than other countries like Australia, thereby reducing supply options and increasing the cost for a marginal benefit. We will be monitoring the proposed changes closely,” says Mike Noon, AA Motoring Affairs General Manager.

For helpful tips on keeping your fuel costs down visit the AA website: or go to:


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