BP raises prices, retreats

Motorists took fright at a 6c leap in petrol and diesel prices at BP pumps yesterday, but the company pulled back in the afternoon after rival suppliers refused to follow.

A taxi driver filling up at one Auckland station at midday was horrified to find 91-octane petrol had jumped to 125.5c a litre and diesel to 82.5c. "It's almost not worth going to work," he said.

Petrol was almost the highest it had ever reached on any industry-wide basis - 125.9c in October, although BP's 91-octane hit 127.9c for a few hours in May in a similarly unsuccessful bid to coax up other oil companies.

BP's main-centre prices were back in line with those of the other companies last night at 119.5c for 91-octane and 76.5c for diesel.

Petrol had on Thursday been as low as 114.5c in Auckland and some other centres after the big companies, including BP, matched a one-day promotion by minnow supplier Gull Petroleum.

A BP spokesman acknowledged that competitive pressure had brought prices back down, but said this meant high international oil costs were not reflected at pumps.

He noted that the price of oil traded in the Middle East yesterday was more than US$2.30c higher than in October, at US$41.52c ($57.36c).

But Automobile Association spokesman George Fairbairn questioned the justification of the increase when the New Zealand dollar was the highest it had been against the United States greenback since 1985.

Despite BP's rethink, Mr Fairbairn said the Government's planned 5c hike in petrol excise (before GST) to pay for new roads was similarly untenable given the large contribution motorists already made to the Consolidated Account.