While motorists enjoy cheap petrol and diesel this Easter, the Motor Trade Association (MTA) warns there could be a long-term cost of the discounting to both industry and consumers.
All major oil companies followed the lead of BP yesterday, dropping petrol and diesel prices by 10 cents a litre until 6pm today.
MTA national president Denis Sullivan said that while the price cuts were great news for motorists, the small profit margins were unsustainable and made it difficult for independent operators.
"We have a situation where about half the independent service stations are losing money on their operations due to literally no margin to run their businesses on. Many of our retailers are in fact losing money to stay in the market."
Mr Sullivan said independent service stations, which currently pump 28% of the nations fuel, could be forced out of business leaving the market controlled by "an oligopoly" of the major oil companies.
"Savage price competition like these Easter promotions could see more independents closing and consumers faced with retailing of fuel dominated by all of the industry suppliers and prices will inevitably rise."
He said the price of fuel had a major effect on the economy and the daily lives of most New Zealanders.
The MTA called for urgent Government intervention into the implications of such major petrol price competition, said Mr Sullivan.
Motor industry alarmed by petrol price cuts
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