AA calls for inquiry on fuel pricing

New Zealand Herald Photograph

Fuel companies’ margins are the highest in decades and regional price variations are too great, analyst says.

The Automobile Association has called for a ministerial inquiry into the cost of fuel as an informal survey found variations of up to $1.34 at different sites around the country.

Last week, the Australian Competition and Consumer Commission (ACCC) said it would investigate why petrol prices had not fallen as much in rural and regional areas as they had in cities.

Petrol prices dropped below A$1 a litre in Melbourne this week, hitting a six-year low.

However, in the Tasmanian capital, Hobart, petrol remains 15 to 20 cents per litre more expensive than on the mainland, leading to calls for the commission's inquiry to be expanded to investigate the disparity.

AA senior policy analyst Mark Stockdale said New Zealand's petrol market wasn't comparable to Australia's as we paid about 50 cents per litre more due to higher taxation levels and the exchange rate.

However, while the ACCC reviewed petrol prices annually, New Zealand had not had such a review since one was commissioned by the Labour Government in 2008.

Fuel companies' profit margins were currently the highest they had been since the 1980s, Mr Stockdale said.

"There has been room for the fuel companies to drop prices further; we've been saying that for the last couple of months."

Rural price variations also needed to be looked at, he said.

"There are cases where prices are 20 to 30 cents a litre lower in some places than in other parts of New Zealand.

"The AA will be contacting the Minister of Energy and outlining some of the concerns that we have."

An informal survey of regional fuel prices conducted by NZME. News Service yesterday found the cheapest petrol remained in South Auckland - $1.55 a litre for 91 octane - and the most expensive on both Chatham and Great Barrier islands, $2.90.

The most expensive petrol on the mainland yesterday was found at Caltex in Westport, where 91 was being sold for 186.9c.

Mulberry Grove Shop at Tryphena on Great Barrier was selling 91 octane for $2.90 a litre.

Employee Chas Joy said the disparity in cost to prices on the mainland reflected the cost of shipping fuel to the island.

They had also dropped the price by 40 cents since last October, he said.

"I wouldn't say [it's] in line with the rest of the country, but proportionate to where we live," Mr Joy said. "For example, 2 litres of milk will cost you $6.50 here, a loaf of bread will cost you near-on $6."

The AA said any ministerial review had to look at regional price variation.

"Wherever you happen to be, the prices should have come down 48 cents [since October]," Mr Stockdale said.

By the numbers

• 155.9c 91 octane at Mobil in East Tamaki, Auckland
• 185c 91 at BP in Martinborough, Wairarapa
• 186.9c 91 at Caltex Westport
• 207.9c 91 at BP Oneroa, Waiheke, Auckland
• 240c 91 at North Barrier Fuel Supplies, Port FitzRoy, Great Barrier
• 290c 91 at Tryphena, Great Barrier
• 290c 91 at Waitangi, Chatham Islands.