Petrol prices surge again

Petrol and diesel prices surged to new highs at New Zealand pumps yesterday, as oil companies passed on higher refining costs in a tightening world market.

The price of standard-grade 91-octane petrol rose at most pumps to 131.9c a litre, and of lesser-used 96-octane to 136.9c, after a 2c rise by the four main oil companies.

Diesel jumped by 4c a litre, to 93.9c, its highest ever nominal price after breaking a record set late in 2003.

Smaller supplier Gull Petroleum was still late yesterday holding off from raising its prices, but spokesman Ulrik Olsen acknowledged they would be forced to start moving up overnight.

Petrol prices dropped almost 11c last month in a tussle by larger companies for greater market share, but are now 2.4c above a record set in April, when the Government lifted its fuel tax by 5.6c (including GST) to pay for new roads and public transport infrastructure. The latest increases follow 4c rises in both petrol and diesel prices last week.

High fuel consumption in the Northern Hemisphere is helping to push world crude oil prices towards US$60 ($84) a barrel, almost 50 per cent higher than in January, and New Zealand suppliers say they have been hit hard by a squeeze in overseas refining capacity.

BP Oil spokesman Jonathan Hill said the price of refined petrol from Singapore had jumped by more than US$7 ($9.80) a barrel since the beginning of this month, and diesel had rocketed up by more than US$10 ($14).

"These prices are driven by a shortage of refining - capacity is very limited," he said.

Automobile Association spokesman George Fairbairn warned that motorists would face even higher prices if the New Zealand dollar started slipping from its high value against US currency.

"The dollar is holding up and giving us some cushioning, but there is a worry that if it starts sliding for whatever reason, the end price [of fuel] will rise even higher."

Mr Fairbairn welcomed an increase in public transport use in Auckland in the past year, but said many people would always remain reliant on their cars because of where they lived or their hours of work.

He urged them to look for special offers from oil companies, such as in discount arrangements through grocery chains or newspaper clip-out coupons.

Road Transport Forum chief executive Tony Friedlander said that although diesel had reached a record high, oil company price margins remained well within historical levels and New Zealand was at the mercy of the world market.