Latest cuts in price bring petrol back near $2 mark

Diesel is down to $1.51 at Shell and Caltex sites and $1.52 from BP and Mobil. Photo / Brett Phibbs

Fuel prices have been cut for the third week running, raising hope that petrol may yet drop back below $2 a litre.

The latest cuts - led untypically by BP at the start of a new advertising battle understood to be for market share against locally owned Z Energy and its Shell network - has taken 91-octane petrol down 4c a litre at most main-centre pumps to $2.09.

That compares with a record $2.22 a litre a fortnight ago, after a sharp spike in world oil prices.

Diesel is down to $1.51 at Shell and Caltex sites and $1.52 from BP and Mobil.

Industry minnow Gull was selling its 91-octane petrol and biofuel blend last night for $2.07 and diesel for $1.50.

BP managing director Mike McGuinness said the latest cuts had been made possible by a strong New Zealand dollar and weakening international refined fuel prices through this month, caused partly by weaker-than-expected United States demand for fuel.

Automobile Association spokesman Mark Stockdale, who two weeks ago warned that the long-term trend was for rising prices and that motorists could not expect them to drop below $2 a litre again, indicated yesterday that he would be happy to be proved wrong.

"It's good refined prices have continued to fall and that's being passed on at the pump properly," he said.

"It makes a change from eight months of price increases."

The last time petrol was below $2 a litre was in January.