AA calls for please explain as fuel prices climb to record heights

Petrol prices are rising, and an increase in petrol excise tax at the end of this month will likely cause them to rise further. Photo / Duncan Brown

The Government has defended the current fuel tax, saying if Kiwi motorists can bite the bullet now the rewards will be recognised in the future.

Transport Minister Phil Twyford said while he feels for New Zealanders, the Government is looking to developments in the future.

"Like all New Zealanders, I don't like to see us pay more at the pump than we should and we want to see a competitive market for petrol," he said.

"The fuel taxes is about the investment in infrastructure that will have a 50 or 100-year lifespan.

"We don't really make those long-term infrastructure investment decisions based on the short-term fluctuations of the petroleum market."

However, the Automobile Association believes motorists deserve an explanation as to why petrol prices have hit another record high.

AA petrol spokesman Mark Stockdale said the price for 91 octane had risen to $2.36 in Wellington and $2.34 in Christchurch.

Motorists were set for another price hike at the end of the month when the Government's 3.5 cents per litre petrol excise duty rise would come into effect.

Motorists would want a "please explain" from fuel companies, Stockdale said.

The average price in the two centres provided a good snapshot of the national price, he said.

"It looks like it has gone up to a new record price. We have never had 91 octane that high, that is the most that motorists have ever paid. It's going to be alarming for people to see petrol prices so high.

"That is the questions motorists ask, 'Why do they keep climbing'? That's up to the fuel company to explain and front up."

The AA was picking prices to rise even further because the Government had announced the petrol tax hike of 3.5 cents, "and with tax we know it will go up by 4 cents by the end of September".

"That will push prices for 91 octane just under $2.40 a litre."

A Z Energy spokesperson said their prices were based on international oil prices, and the strength of the NZD against the USD weighs in heavily.

"Prices are set based on international oil prices, the strength of the NZD against the USD, because we buy oil in USD, and local competition," they said.

"Crude oil and refined products like petrol and diesel are all internationally traded commodities.

"Barrel prices are really high at the moment and increased at the start of this week, this along with a low key dollar is why the price at the pump has gone up."

Lead country manager for Mobil Oil New Zealand Limited, Andrew McNaught, said the New Zealand petroleum market is becoming more and more competitive, hence the high prices.

"Mobil's fuel prices are influenced by a number of factors, including excise duties and taxes, product costs, exchange rates, transportation, retailing costs and local market competition," McNaught said.

"Setting retail prices is thus a balancing act between the immediate effects and influences of the market, versus the longer-term outlook for our business and the industry."