AA blames importers for pushing up petrol prices

The Automobile Association blames an increase in importer margins for a jump in the price of petrol.

Petrol and diesel prices fell by 6c a litre during November but rose by up to 9c a litre by the end of last month.

Although some of the rise could be attributed to higher international oil prices, increases in importer margins made a significant difference, the AA's public affairs director, George Fairbairn, said yesterday.

"It's a margin to cover themselves for costs involved in distribution, freighting and at the end of the day what could be said is their amount over and above their known costs."

Mr Fairbairn said it was possible that importers were increasing this margin because of uncertainty over what would happen in Iraq, a major oil producer, where the United States is threatening war.

International oil prices were at a two-year high and could rise further because of tensions in the Middle East.

But Mr Fairbairn said New Zealand had been somewhat cushioned from the international impact because of the strong New Zealand dollar and he was surprised importers had chosen to increase margins now.

"Our estimates show importer margins increased significantly immediately prior to the holiday period, which raises concerns over such timing," he said.

"We find it a little surprising the margins have been increased at this time when, if they were hedging their bets, the dollar has been showing such positive strengthening.

"We would have thought one might have countered the other."

Importer margins were at a 13-month high in the last week in December and data since 1999 showed no usual pattern of increased margins over the Christmas holiday period.

Petrol prices at present range from $1.07 to $1.14 for 91-octane petrol, $1.10 to $1.19 for 96-octane petrol and 70c to 76c for diesel.

Reuters figures showed Dubai light crude from Singapore, the most commonly used variety in New Zealand, fell to a low of NZ$43.69 a barrel in mid-November.

This had dropped from a peak of $59.91 on September 24 and then started to rise again, closing at $51.81 on Monday.

The rise of the New Zealand dollar against the US dollar has mitigated the rise in oil prices, so while the price has risen 25 per cent in US dollars from the November trough, it is up only 18.6 per cent in New Zealand dollars.

Refined petrol from Singapore has risen from $52.83 a barrel in mid-November to $63.72.

- NZPA