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PetrolWatch: Diesel reaches a record

Media Release: 5 February 2008

PetrolWatch – January 2008

Diesel reaches a record

Diesel prices reached a record high of $1.31 per litre in early January, surpassing the high of $1.29 in July 2006 when fuel prices last reached their peak. Petrol prices also rose five cents per litre in January to $1.76 for 91 octane, one cent shy of their record.

“The high summer prices come on the back of crude oil prices breaching the US$100 a barrel barrier, but are mostly because of rising international refined fuel prices,” said AA Motoring Affairs General Manager Mike Noon.

The price peak did not last, with both fuels dropping five cents per litre, back to December levels, where they remained for the rest of the month. According to AA PetrolWatch, at the end of January motorists were paying $1.71 per litre for 91 octane and $1.25 for diesel in the main centres, compared to $1.38 and 94 cents respectively in January 2007.

“Both crude and refined prices began falling in mid-January, although a fall in the New Zealand dollar limited the benefit for motorists. Since then refined prices have been back on the rise, but have been offset by a rising kiwi dollar,” says Mr Noon.

LPG on the up

The petrol and diesel price movements are nothing compared to the 15 cents per litre jump in LPG prices since the start of the year, up from around $1.08 to $1.23 per litre. The cumulative 14 per cent rise comes about due to a number of factors, according to AA PetrolWatch.

“Motorists who use LPG are upset and have been calling us about the massive increase in LPG prices, which came about unexpectedly,” says Mr Noon.

The increase is due to the fact that local LPG prices are now set according to international price benchmarks, which are increasing in line with all energy prices. International LPG prices have risen 58 per cent in the past year, half of that in just the last couple of months.

“New Zealand used to be a net LPG exporter, so we were able to set the local price. However, as Maui supplies have declined we have become an LPG importer, so our prices have gradually been rising as international supply contracts are renewed.”

“It is worth LPG users shopping around as an ad hoc survey of LPG prices in the main centres in late January by AA PetrolWatch showed some stations still selling it for $1.08. This is probably due to the low turnover of LPG, meaning some stations had yet to restock at the new price,” says Mr Noon.

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