Hot dollar keeps lid on NZ petrol prices

A strong kiwi dollar and falling world oil prices should keep local petrol prices down in the short term, says the AA. Photo / Thinkstock

The climbing New Zealand dollar and falling world oil prices should keep a lid on petrol prices says the Automobile Association but it is calling for a cut to diesel prices.

The kiwi dollar climbed to three year high overnight, jumping above the US88c level after credit ratings agency Fitch Ratings reaffirmed the country's AA rating and upgraded its outlook to positive from stable.And world oil prices are continuing to fall as concerns ease over supply disruptions from the Middle East, with Libyan exports set to resume and signs of stability returning to Iraq.

Benchmark Brent fell US$1.30 a barrel to close at $108.94 a barrel in London trade.

AA Petrolwatch spokesman Mark Stockdale said the falling crude oil price could result in lower petrol prices here in the longer term but the refined price had risen sharply last week and was still high.

The New Zealand dollar was keeping a lid on the price of petrol which across the country averages $2.24 a litre for 91 unleaded. It has risen steadily during the past six weeks.

Stockdale said refined petrol prices were affected by global refinery capacity and demand for the fuel, which is strong at present.

However, the price of refined diesel had fallen, leading to a 4c a litre reduction last week and there was room for a drop of a similar amount now.

Diesel prices are critical to businesses relying on freight and the growing number of private diesel vehicles.

Stockdale said the price of diesel was just under $1.50 a litre.