Higher oil prices pump prices up

Media Release: 5 November 2009

PetrolWatch – October 2009

Higher oil prices and a lower dollar force pump prices up

After a 14 cent reduction in retail petrol prices during September, prices rose on three occasions during October, in part due to rising commodity prices and a fall in the exchange rate.

According to AA PetrolWatch, the price of diesel rose eight cents to $1.08 per litre during October. A litre of 91-octane petrol rose 11 cents to $1.66 in the main centres, three cents of which was due to the increase in petrol excise on 1 October.

AA PetrolWatch Spokesperson Mark Stockdale said “motorists were hit by a double-whammy during October, with rising commodity prices and a falling exchange rate. When either the dollar goes down or import costs go up, that usually results in a price rise at the pump. With both indicators moving in the wrong direction during October, it’s hardly surprising there were increases in the retail price.”

AA PetrolWatch notes that crude oil prices rose 20 per cent during October, at one point breaching the US$80 a barrel barrier. This is twice as much as a barrel was costing just eight months ago, when retail prices were nearly the same but the Kiwi dollar was 51 US cents compared to over 71 US cents today.

“Our dollar has been climbing steadily for months, and in so doing protecting motorists from the rising commodity prices. However, the dollar has now fallen from a mid-October peak of 76 US cents to 72 cents and crude prices have remained high – this lead to another increase in pump prices,” Mr Stockdale said.

For more information, go to: www.aa.co.nz/aapetrolwatch  

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