Petrol drops 2c a litre

Oil companies today dropped the price of petrol and diesel by 2c a litre, the second decrease in a week.

BP spokesman Jonathan Hill said he understood the company was the first to be making the decrease today. It would take diesel to 97.9c a litre, 91 petrol to 151.9c and 96 petrol to 156.9.

International factors which had seen prices rise in recent times had started to ease, Mr Hill said. The price of both refined fuel and crude oil had eased.

Later this morning it was confirmed that both Mobil and Shell were also dropping their prices today by 2c a litre. The new Mobil prices were the same as those charged by BP while Shell's were the same for diesel and 91 but was 155.9c for 96.

Caltex confirmed around lunchtime that it, too, was dropping prices by 2c a litre today.

The international price of oil fell slightly overnight, extending a slide sparked by evidence that high prices were starting to slow global economic growth and curb US fuel demand.

But losses were checked by worries that the US oil industry's recovery from Hurricane Katrina two weeks ago had stalled, leaving 5 per cent of the country's refining capacity and nearly half its Gulf of Mexico oil production offline.

US light crude settled down 23 US cents to US$63.11 a barrel, after dropping 74 US cents in New York on Monday. Prices are more than US$7 below record highs hit two weeks ago.

Crude oil spiked to US$70.85 a barrel after Hurricane Katrina slammed into the US Gulf Coast in late August, cutting nearly all offshore production and shutting eight refineries.

- NZPA