Petrol prices could stay high for years - expert

Petrol prices could stay high for years as 'perfect storm' contributes to cost.Photo: RNZ / Dan Cook

A pricing expert says it is possible petrol could stay at the $3 per litre mark for the next few years with motorists currently facing "a perfect storm" of different pressures.

Last week the European Union announced further sanctions on Russia, putting increased pressure on the supply of oil.

The government's 25 cent fuel tax cut which was introduced on March 15 to address living costs is also due to expire in just over a month.

Automobile Association principal policy advisor Terry Collins says the war in Ukraine, the pressure on supply, and the coronavirus pandemic were all contributing to rising costs.

"This is a perfect storm we're in, with the sanctions, the demand increasing, and the supply is static.

"Will it get to $4 a litre? I can't guarantee that. But maybe sometime in the future - when that is, it's very hard to predict."

It was likely prices would consistently sit at about $3 a litre for the next few years, he says.

But he says overall fuel use will probably remain the same - when the price of fuel rose by 10 per cent, it only made a 1.5 percent difference in consumption.

"People don't have a lot of discretionary ability to change their behaviour and use less fuel just based on price."

The government has indicated the fuel tax cut will be eased out gradually to avoid more price spikes.

In Christchurch, drivers at the pump are starting to look for other options as prices inched back up.

One woman says her family wouldn't be able to afford to drive for much longer.

"We're looking at alternatives, possibly [my husband] getting a motorbike so that it's actually most cost effective for him to use that, but with winter coming and the Christchurch weather so unpredictable, health-wise, I don't think it's a good idea."

She's frustrated people are being told to get out and support the local economy when they couldn't afford basic living costs.

"You basically can't support the local economy because it's costing you too much just to live."

A mother of two says she has never been able to drive to different regions because of the cost, and had never had a full tank of petrol.

"I've never spent more than $50. I've never pressed the fill button, ever."

She only drove to take her children out and get groceries, but she said when petrol prices first spiked, even that was beyond the budget.

On Sunday afternoon, a litre of unleaded 91 octane petrol cost an average of $2.78, according to fuel app Gaspy, a 15c increase over the past 28 days.

Unleaded 95 had risen 19c over that time to $2.96, just shy of $3, while unleaded 98 was at $3.13, up 22c. Diesel was up 27c to $2.52.




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7 Comments

@Yadick

Posted on 12-05-2022 11:28 | By morepork

Amen. Distribution costs are pretty much the same all over the country so why the crazy price discrepancies? It has to be profiteering and shameless gouging by the bowser owners. Greed is a great driver for prices. The Government and the Oil companies are not the only ones who are on the gasoline gravy train...

Gst

Posted on 11-05-2022 16:04 | By Kancho

The higher prices means more tax take in gst. Even taking off the excise tax they still take in more on everything sold, Or services rendered . So more taxes at a time of struggle. Funny how Robertson has billions more to spend in the lolly scramble , vote catching spend up coming in the budget

blahblahblah

Posted on 11-05-2022 00:03 | By hexsayer

yeah blame whats happening in Aotearoa with with gas and societal collapse on on Russia/Ukraine. Instead of our useless "PM" and her chamber echo-cabinet. build more giant rotating blades on the hillside that cost more to repair than they cost to build, install more solar panels that only warranty for 4 years, and last 7 years if youre lucky. also don’t forget to fail to mention these "environmentaly friendly" options cant be recycled, dont break down, and contribute to more "greenhouse gasses" instead of reducing them. buy an EV you’ll never afford or pedal everywhere. how about, shove it!

cost

Posted on 10-05-2022 14:05 | By dumbkof2

just come back from wellington a little place in the middle of nowhere with just a store and pumps. 95 was 2.71 a litre. at the next town it was 2.99. At the previous town it was 3.02c. how can there possibly be such a difference in price. oh i forgot co rip offs.

This govt will press it higher

Posted on 10-05-2022 11:27 | By an_alias

Labour shut down the oil industry without consultation, we are now closing our only processing plant. 50% of price if a floating petrol tax and GST is a tax on a tax. The higher the price the more money govt gets. Its an absolute farce.

All wind and arms and nodding

Posted on 10-05-2022 08:35 | By Chookymac

This so called PM has not kept any of the promises she blathers about NZ needs to get rid of this Govt and all its so called ministers quick

Government Greed

Posted on 10-05-2022 08:04 | By Yadick

I see every excuse getting flung around but what about greed. I do a LOT of travel and often petrol prices here in Tauranga are higher than Auckland yet Auckland has a .10c surcharge over-and-above the rest of the country. Some far, out of the way places are cheaper than Tauranga so location and delivery have minimal to no effect. Mobil Chapel Street, Mobil Ngatai Road and Mobil Cameron Road used to be the cheapest and best place but have now somehow become the most expensive. How do you go from top of list to bottom of the list almost overnight? Little out of the way Gull Atiamuri is by far the cheapest. Safe travels people.

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