Petrol companies considering effect of latest oil price hike

Oil companies are considering their options, after a dramatic increase in the price of oil, but the Automobile Association is urging them to show restraint.

BP will consider its position on pump prices tomorrow, after crude oil shot up US$11 yesterday to trade at US$138 a barrel.

Experts are suggesting prices will reach US$150 a barrel before the US Independence Day holiday on July 4.

There is a general rule of thumb that each dollar on the price of a barrel shakes out to an extra cent a litre at the service station.

Mike Noon, AA spokesman, is urging petrol companies to hold off increasing prices up for as long as possible, to make sure the latest hike in crude is not just a blip in the market.

But Mr Noon admits that the price of crude oil is a major input into the factors that set the price of fuel.

He says the refined price of petrol and the value of the New Zealand dollar against the greenback are the other participants.

- NEWSTALK ZB