Petrol prices keep falling - BP, Z cut

New Zealand Herald file Photogarph

The cost of filling up the tank has fallen again, with BP and Z Energy dropping prices at the pump.

BP and Z Energy have cut prices for fuel this morning, removing two cents per litre on unleaded and three cents per litre on diesel fuel, the third fall in less than a week.

A drop in the cost of refined product costs has led to the reduction in cost at the pump, BP communications manager Shelly Brady said.

"This is the third national price decrease BP has had since Friday.

"BP has removed six cents from the national price of unleaded and eight cents from the national price of diesel in less than a week," she said.

BP national prices as at 9 December 2015:
• 91 Unleaded 187.9 cents per litre
• 95 Unleaded 196.9 cents per litre
• Ultimate 98 204.9 cents per litre
• Ultimate Diesel 111.9 cents per litre

The Automobile Association said further falls in the cost of filling up weren't expected before Christmas.

At current prices, fuel is at its lowest point since February, AA Petrolwatch spokesman Murray Stockdale said.

"This is mostly due to further reductions in commodity prices, and a slight strengthening of the NZ dollar which is back over US67c for the first time in a month," Stockdale said.

While oil prices have fallen to US$40/barrel - almost the lowest since January 2009 - the commodity price for petrol ws US$63/barrel.

The last time refined fuel commodity prices were this low, petrol prices were $1.73/litre (diesel $1.07/litre), but allowing for the reduction in the exchange rate since then, the imported cost of petrol is 8c higher today while GST on the higher price adds another 3c, Stockdale said.

The association said the national fuel price for 91 Octane petrol was 189.9c/litre and 198.9c for 95 Octane. Diesel is at 114.9c/litre.

"This time last year, retail prices were $2/litre (and diesel $1.32/litre), but we're not expecting big reductions in pump prices like we had last Christmas, mainly because oil prices are already down at the levels they fell to last December-January," Stockdale said.

On the international markets, oil prices were at their lowest level in more than six years amid speculation that a record global glut will be prolonged after OPEC effectively abandoned its long time strategy of limiting output to control prices.

The Organisation of Petroleum Exporting Countries will keep pumping about 31.5 million barrels a day, President Emmanuel Ibe Kachikwu said on Friday.

OPEC is setting aside its output quota of 30 million barrels a day, a target it's breached the past 18 months, until members gather again in June.

Bloomberg reported West Texas Intermediate for January delivery sank US$2.32, or 5.8 percent, to settle at $37.65 a barrel on the New York Mercantile Exchange, the lowest close since February 2009.