Lower oil prices offset by falling exchange rate

PetrolWatch – September 2011

Lower oil prices offset by falling exchange rate

The price of petrol rose 3 cents-per-litre during September, ending the month on $2.10-a-litre for 91 octane in the main centres, with 95 octane on $2.18 and 98 octane (where sold) on $2.26-a-litre. Diesel prices rose 2 cents during the month, to finish on $1.47-a-litre at most outlets.

“The price rise reflected a drop in the value of the New Zealand dollar in early September. Since then, the Kiwi has dropped further, but at the same time commodity prices have also fallen, so one is offsetting the other,” says AA PetrolWatch spokesperson Mark Stockdale.

“Oil prices dropped over US$10-a-barrel during September, and refined petrol prices are down about US 10 cents-a-litre, but allowing for the 8 cent drop in the exchange rate, the net imported cost of petrol is up about 2 cents-a-litre since the beginning of the month.

“If it wasn’t for the fall in commodity prices, at the current exchange rate we’d be paying at least $2.20 for a litre of petrol,” said Mr Stockdale.

Mr Stockdale warns that if the New Zealand dollar continues to fall, we could face further price rises. But the AA says there are a number of things drivers can do to help offset higher fuel costs.

“AA tests have shown that the average driver can cut their fuel consumption by as much as 40 per cent just by adopting a few simple fuel saving tips. That’s the equivalent of 80 cents a litre or about $800 per year for the average motorist,” said Mr Stockdale.

AA tests resulted in the following fuel savings from these actions:
• Air-conditioning off – saved 8.68%*
• Using fuel-efficient tyres – saved 4.71%
• Incorrect tyre pressures – used 7.76% more
• Added weight and drag – used 11.11% more
• Poor driving style – used almost 20% more

Last year an AA survey found that nearly 50 per cent of cars could have underinflated tyres, meaning nearly half of all motorists could be wasting about $100 worth of fuel a year.

The AA advises drivers to use air conditioning judiciously – if you’re feeling tired, keep it on

ENDS

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