Petrol prices have dropped two cents a litre on the back of comments from the Automobile Association calling the latest rise 'unjustified”.

AA spokesman Mark Stockdale says fuel companies have dropped their prices thanks to slightly declining commodity prices and a marginally strengthening dollar.

Fuel companies have dropped petrol prices by two cents a litre.

'Diesel prices remain unchanged as they haven't changed since mid-February,” says Mark.

'Although oil prices have fallen to just under US$55 per barrel, the commodity price for refined petrol and diesel is US$80 per barrel, which includes the all-important cost of refining oil into retail fuel.”

Marks says this is often overlooked by casual observers even though its refined fuel that motorists actually buy (the difference equates to about an extra 20c on the pump price).

'At that commodity price, it equates to about 69c per litre,” he adds, 'down from 96c per litre in the middle of last year when commodity prices were US$110 per barrel for oil and over US$130 per barrel for refined fuel.

'The NZ dollar was also worth 14c more.

'And guess what? Retail prices today are 29c less than when they peaked at $2.24 per litre in July.”