The price of petrol is on the rise with fuel companies hiking the price to accommodate a two cent rise in excise tax overnight.

From 7am this morning 91 octane now costs $2.129 per litre and Premium fuel is now $2.209 per litre. The cost of diesel remains unchanged at $1.509 per litre.

Petrol rose 14 cents per litre last month after two months of falling prices, and diesel was up 10 cents per litre.

The price of 91 octane petrol rose from $1.97 per litre to $2.11 per litre by the end of July in the main centres, with the price of diesel at most service stations finishing on $1.51 per litre.

Jonathan Hill Z Energy spokesperson says the price at the Z Station pumps has risen to accommodate the increased excise tax, which rose from 48.5 cents a litre to 50.5 cents a litre overnight.

'Tax makes up about half of the price of fuel at the pump. But doesn't apply to diesel as that is collected through road user charges,” says Jonathan.

Fuel companies increased their price despite calls from the AA to absorb the increase.

'After crude oil prices fell to 18-month lows of US$88 a barrel in June, they then jumped 20 per cent during July,” says petrol watch spokesperson Mark Stockdale.

'That resulted in a 17 per cent increase in refined petrol prices, which for motorists equated to a seven per cent increase in petrol pump prices.”

'Although taxes are rising, the AA is calling on fuel companies not to increase retail prices. Our monitoring of commodity prices and importer margins shows last week's petrol price rise of 3 cents per litre was unnecessary. Fuel companies can afford to absorb the tax increase.”

'If the tax was not increasing, the AA would be calling for a price cut, and we believe diesel pump prices should be coming down anyway.”

The last increase in fuel excise was 3 cents per litre in 2010, with the Government postponing a planned rise in 2011. Today's increase means the average motorist will be paying $700 a year in excise.

All of the excise and RUC is spent on road maintenance, safety improvements, road building and public transport. Petrol vehicle owners contributed $1.45billion in fuel excise in the last financial year while owners of light diesel vehicles paid $270m in RUC.

Total taxes on petrol, including ACC, are now 61.1 cents per litre, plus another 27.5 cents per litre in GST at current prices for 91 octane, with taxes making up 42 per cent of the retail price of petrol.

Current prices per litre as at August 1:

Caltex: 95/96 octane $2.199, 91 octane $2.049, Diesel $1.519

Mobil: 95/96 octane $2.019, 91 octane $1.909, Diesel $1.459

Shell: 95/96 octane $2.209, 91 octane $2.129, Diesel $1.509

Gull: 91 octane $1.929, Diesel $1.429

Gas Alley: 95/96 octane $2.319, 91 octane $2.099, Diesel $1.519