Fuel prices in Whangārei brought down by competition and pressure

Whangārei had the highest petrol prices in the country in March 2023 but this dropped when a new self-service station entered the market, the Commerce Commission has found. Photo / Peter Meecham

A Commerce Commission investigation found Whangārei’s high fuel prices were due to a lack of intense competition but new players in the market are making a difference.

The regulatory agency looked into fuel prices at the pump, especially in Whangārei - which had the most expensive 91 unleaded petrol in the country in March 2023 - compared with Hamilton, which had the least expensive fuel at the time, said acting general manager of market regulation Simon Thomson.

“We also note that this is an interesting comparison due to Whangārei’s proximity to the Marsden Point import terminal, while fuel sold in Hamilton has to be trucked from Auckland.”

Its report released last week found the price differences cannot be explained by a difference in costs but intense competition pushed prices down.

But the report also found price differences between Whangārei and Hamilton dropped during 2023 as Whangārei became more competitive, especially with the introduction of Allied Petroleum’s self-service station on Kioreroa Rd expanding from a truck-only stop in December 2023.

This increased local competition and contributed to the drop in prices in the city, Thomson said.

The study found that, overall, having at least one unstaffed fuel station - without attachment to a store or supermarket - lowered fuel prices by an average of 6c per litre within a five-minute drive, when compared with areas without unstaffed fuel stations.

The Commerce Commission is now pushing for a competitive fuel wholesale market, which would allow companies to set up new petrol stations, particularly the fuel-only unstaffed stations.

Thomson also said the focus of both the Commerce Commission and media on Whangārei’s high prices also appeared to make a difference in lowering the city’s prices by showing companies they risked damaging their brand.

“We consider that putting the spotlight on pricing disparities puts pressure on fuel companies that can result in lower prices,” he said.

“Highlighting these disparities can also put pressure on fuel companies, particularly to the extent that charging higher prices to consumers, that are not justified by higher costs, may damage these companies’ brands.”

Thomson said motorists can find cheaper fuel by “shopping around” - comparing prices by using the likes of the Gaspy app or PriceWatch - and not being persuaded by loyalty cards alone.

“Motorists can use apps like Gaspy to seek out lower prices. Motorists should also be aware that using loyalty or discount schemes does not necessarily lead to the lowest available prices.”

Whangārei motorists still feeling pain at the pump

The Allied Petrol self-service station, which changed from servicing only trucks to offering 91 and 95 petrol to the public in December 2023, is credited with adding to competition. Photo / Denise Piper

Petrol prices in central Whangārei are now below the peak of September 2023, when 91 unleaded topped $3 a litre.

According to Gaspy, petrol prices in central Whangārei on Friday ranged from $2.77 a litre at New World Regent to $2.94 at GAS Tikipunga. Allied Petrol’s self-service station is $2.83.

But Whangārei motorists say the price is still hurting and they are doing what they can to reduce costs.

Valerie Le Vaillant said petrol prices are too expensive: “It’s really ridiculous. Just with the cost of everything else, it makes it hard to fill up, along with keeping a roof over your head and the prices of food.”

Le Vaillant said she usually fills up at Mobil, where she gets Mobil Smiles discounts but she also looks out for discount vouchers at Gull.

Whangārei motorist Julie, who did not want to give her last name, said she was surprised at the difference between the big players like Z, Mobil, Caltex and BP, and the smaller self-service stations like Allied or New World.

“If they can keep the prices cheaper, why can’t the rest of them?”

Julie said she normally buys fuel at New World, where she also does her shopping, but she uses the Allied station when she drives past that way.

Charlotte Tucker said the high price of petrol does hurt “a wee bit” when she has to fill up.

She said she did not shop around but preferred to use the station closest to where she lives in Tikipunga.

Denise Piper is a news reporter for the Northern Advocate, focusing on health and business. She has more than 20 years in journalism and is passionate about covering stories that make a difference.