Letter to the Editor Thursday April 4, 2013

No defence?

I read with interest Colin Campbell's letter to the editor some weeks back re Far North fuel prices as charged by the service stations north of the Mangamukas. I looked forward to further comment from readers, and at least some defence, if there was some, from the local service stations.

Disappointingly there was no response. Perhaps there was no defence.

Like Colin I find it infuriating that the local service stations portray a picture of collusion. Ever noticed that with perhaps one exception over the past six months they all change their prices within minutes of each other? (Caltex Kaitaia was that exception, and they changed within a day or so).

Ever noticed that a national price drop lags locally by weeks, if not months, but a national price rise is virtually instantaneous?

If my perception is correct each service station buys fuel for their tanks at the going price and applies their collective mark-up. Therefore it would be fair to assume that that price would apply until that amount was exhausted, then any new rate would apply.

If this were true, surely the disparity in prices at each service station would be evident as they wouldn't all either fill or exhaust their current stocks at the same time.

Then we get to the vast disparity in the price of fuel geographically. As I predominantly use diesel I'll refer to price differences with that type of fuel, although I'm told the disparity with petrol is even greater.

So maybe local fuel retailers can tell me why their fuel is at least 10 cents a litre, or 45 cents a gallon, dearer than that available from at least two retailers in Whangarei. Kaikohe slightly lower-priced than Kaitaia. Processed fuel from the Marsden Point refinery is piped to Wiri, Auckland, coastal tankered around New Zealand. Presumably most of North Auckland is by road tanker.

Having travelled regularly from Kaitaia - Auckland - Tauranga -Rotorua, I make a point of observing fuel prices at service stations along the way. Mobil and Gull are invariably the best priced, with the auto serve/pay station at Ngatea Mobil the best (12 cents a litre better than Kaitaia and about two cents a litre better than best price in Auckland). Mobil Kamo competes nicely with Gull in south Whangarei, again at the best Auckland price.

There's a vast disparity in prices in Auckland, Tauranga and Rotorua, again with Gull and Mobil (Rotorua) coming out at the lowest prices.

If we are to assume that automated stations such as Ngatea, and now supermarkets, can lower their prices due to lower staffing (none) levels that auto/serve/pay brings, why is it that supermarket fuel prices are not within the same ball park as Ngatea? Kaitaia's Pak'nSave is only 2 cents a litre down on local service stations.

I thought the marketing ploy was to shift more supermarket stock by increasing the discount on fuel sold at the supermarket for the greater amount of supermarket product sold. Given the amount of saving offered, how many shoppers bother?

Again there are questions relating to the cost of fuel ex the Marsden Point refinery tinkered to Kaitaia, and the mark-up by the various retailers.

It would be an interesting exercise to compare the amount of fuel shifted by various service stations over the upper North Island to see whether the argument of smaller markets versus greater competition actually shows we're being sold a lemon or not.

PETE BROUGHTON

Victoria Valley