17 August 2000 Media Statement

Crude oil price increases = petrol increases, but not the other way around

Petrol prices increases today reinforce the need for a benchmark petrol price, Deputy Prime Minister Jim Anderton said.

"Crude oil prices go up and down all the time. But it seems that when they go up petrol prices increase yet when they go down oil companies say crude oil is not a major factor in petrol prices," Deputy Prime Minister Jim Anderton said.

"A month ago crude oil prices were at a high of $NZ 66 a barrel. At that time petrol was $1.119 a litre.

"Over the next two weeks they plummeted to $NZ 55.72 a barrel. But the petrol price did not change.

"Since then crude oil prices have increased and so have petrol prices, by 3 cents on the 7th of August and another 3 cents today.

"It seems that crude oil price increases have a marked effect on petrol prices but crude oil price decreases do not.

"These contradictory signals from petrol companies reinforce the need for a petrol price benchmark.

"Petrol and crude oil prices move all the time. All New Zealanders want to know what is a fair price at any given moment.

"A benchmark price would take into account crude oil price movements and would allow more informed debate on this issue.

Jim Anderton said oil companies appear to be colluding in their attempt to blame tax for the price of petrol.

"What they are asking for is a government subsidy for increased petrol prices.

"When petrol prices go up spending on other goods goes down. So higher petrol prices do not deliver a net increase in total GST revenue received by the government.

"Petrol companies know this. If they can't tell the truth about this why should the public believe them about anything else," Jim Anderton said.

ENDS

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