Oil prices low but not petrol

Petrol priced at its lowest in Wairarapa, at 179.9 cents per litre at Caltex Solway. Photo / Lynda Feringa

Oil might be at a seven-year low but don't expect to see that reflected at the pump.

"While oil prices have dropped, commodity prices for refined fuels - petrol and diesel - are actually only down at levels that we saw last January," says AA senior policy analyst Mark Stockdale.

He said the global commodity price drop for oil was a result of supply and demand.

"There's good supply which is more than meeting demand."

Prices at the pump had dropped 8 cents a litre in the last month, Mr Stockdale said, which reflected falling commodity prices for refined fuels. However, prices for refined fuels "hadn't fallen as much".

"The refined price for a barrel of petrol is 50 per cent more than a barrel of oil. That is adding an extra 20 cents a litre to the price we pay," he said.

"If the commodity price for refined fuels continue to fall as they have been we can expect to see some more price cuts at the pump, but that remains to be seen."

As of yesterday diesel prices were down 3 cents, but diesel and petrol commodity prices moved differently, Mr Stockdale said.

According to AA, petrol prices in Wairarapa were lower than other parts of the country - "thanks to strong local competition".

"As locals well know, they do have some good price competition, especially in Masterton."

He said the average price per litre was about $1.88 in Wellington, as it was in many other places in New Zealand. Based on a snapshot survey at petrol prices in Wairarapa yesterday, prices ranged from 179.9 to 189.9 cents per litre.

Nearly all Masterton service stations had the lowest pump price for 91 petrol at 179.9 cents per litre. This was followed by Tom Wilson Motors in Martinborough, which was selling 91 petrol for 181.9 cents per litre, as was Gasoline Alley Eketahuna.

In Carterton the price was 184.9 cents per litre, in Featherston it was 185.9 cents per litre, and Challenge Greytown had the highest price at 189.9 cents per litre.

Challenge Parkview Motors was one of the Masterton service stations with the lowest Wairarapa gas price of 179.9 cents per litre. Owner Diane Mason said it had been that price since last Thursday.

She had been unaware of the national price drop in oil and said the petrol price was determined by competitor service stations in the region. "We all follow suit, it doesn't really matter who's the first to do it."

Mr Stockdale said it had been predicted oil prices would remain low over the next few years.