Coronavirus: Z Energy and Caltex cut petrol prices after oil markets sink

Two big chains have reduced what motorists pay at the pump after an oil price plunge. Photo / File

Z Energy and Caltex fuel stations are dropping the price of fuel by 7 cents a litre today.

It follows a drop of 6c a litre yesterday.

Prices were clearly moving down at the pump in response to global price reductions on oil, AA Petrolwatch spokesman Mark Stockdale told the Herald.

"That's what we'd expect to see," he said. "We're definitely seeing some pump price reductions today following the drop in the oil price."

On Sunday, Z Energy said it and other fuel retailers were keeping an eye on "significant movements" in the oil market.

"It is clear that the impact of Covid-19 is escalating when it comes to global commodity markets, and that this is now likely being compounded by geopolitical machinations in relation to oil-producing states," the retailer said.

OIL

Oil prices fell as much as 30 per cent yesterday morning when the markets opened - the biggest single-day fall since the start of the Iraq war in 1991.

Since the start of 2020, the national price of petrol had fallen 16c and there was no reason the trend would not continue, Stockdale said yesterday.

"Most of the reductions that we've seen since January have been due to declining demand and most of that has occurred since the [coronavirus] outbreak.

"It's likely there'll be another drop at the pump this week … given the reductions that we've seen so far over the last couple of months."

The cheapest fuel station for 91 octane in New Zealand this morning is Pak'nSave Rangiora which is charging $1.88 per litre, according to Gaspy.

"Yesterday, we put our prices down by up to 6c per litre across 90 per cent of our sites," Z Energy said in a statement this morning.

"This morning, we've responded by putting down prices a further 7 cents per litre across our entire network."

The retailer had been monitoring the price of crude following news yesterday Opec and Russia were unable to reach an agreement on production.

The global price of oil sank after Russia refused to roll back production in response to falling demand and Saudi Arabia signalled it would ramp up its own output. While low oil prices can translate into cheaper petrol, they wreak havoc on energy companies and countries that count on petroleum revenue, including the No 1 producer, the US.

The clash between the two giant oil producers came as Italy — the country hit hardest by the coronavirus in Europe — began enforcing a lockdown against 16 million people in the north, the heart of its manufacturing and financial industries. The turmoil is expected to push Italy into recession and weigh on the European economy.