Cheap fuel saves $500 over a year

SAVINGS: Drivers are saving more than $20 filling their car, thanks to the low fuel prices.PHOTO/FILE

The lowest fuel prices in nearly five years means car owners are saving over $20 when filling their car - potentially $500 a year.

After a run of 22 consecutive price cuts since October, petrol prices fell to their lowest levels since May 2010, and diesel to prices not seen since 2009.

Petrol prices fell 17 cents per litre in the first half of January, with the price of 91 octane ending the month on $1.73 per litre at most outlets, although many service stations in parts of the North Island were discounting prices below this.

Diesel fell 15 cents per litre in January to $1.07 per litre by month end in the main centres.

AA PetrolWatch spokesman Mark Stockdale said: "Since early October, the price of petrol fell 49 cents per litre, and diesel 45 cents per litre, the biggest price cuts on record since 2008."

According to AA PetrolWatch, commodity prices fell 44 cents per litre between October and mid-January.

"Some drivers may be surprised to learn that the commodity price now makes up just over a quarter of the retail price of petrol, with taxes making up over half.

"Even if the price of oil fell to just $1 a barrel, we'd still be paying about $1.25 per litre for petrol, thanks mostly to taxes which fund our transport system," Mr Stockdale said.