Petrol prices have fallen another two cents on the back of last week's price drop.

The price cut was led by BP and was predicted by the Automobile Association last Thursday.

Petrol prices have dropped another two cents.

91 Octane is now $1.92 across the board, while 95 Octane is $2.01 and diesel is $1.19.

'It's a bit overdue,” says AA spokesperson Mark Stockdale, 'and since then the NZ$ has strengthened a bit further, so two cents is not enough in our view.

'Since early March, when commodity prices for refined fuel peaked for the year at US$82 per barrel – and retail prices hit $1.97 per litre for 91 octane – the commodity price has fallen US$5-6 per barrel, which equates to a drop in the imported cost of petrol of about five cents per litre, and three cents per litre for diesel.

'But petrol and diesel pump prices are only down four cents and two cents respectively this month, and yesterday the NZ$ gained over one cent, suggesting there is ample scope for another price cut.

'As we noted earlier, a price cut of four cents on petrol, and three cents on diesel would have been more like it.”

At current commodity prices, the imported cost of petrol makes up just a third of the retail price (64 cents per litre) – and taxes nearly half (93 cents per litre).