Price of standard petrol painfully close to $1.50

Motorists are being stung by yet another petrol price rise - of 4c a litre - pushing the cost of 91-octane grade uncomfortably close to $1.50c.

Three of the main oil companies lifted petrol prices yesterday, as the New Zealand Refining Company posted a bumper half-year profit of $62 million after tax. Caltex was likely to put up its prices overnight.

Drivers now pay 147.9c a litre for 91-octane at most main-centre pumps, and 152.9c for 96-octane - making petrol 34 per cent dearer than at the end of last year.

Exceptions will be Caltex stations, which maintain a 6c differential between the two grades and were expected to charge 153.9c for 96.

Many owners of high-performance vehicles are paying as much as 156.9c, the price BP is now charging for its 98-octane "ultimate" grade.

Small player Gull Petroleum is again holding out against a rise at most of its 30 stations, but is likely to follow after a price review this morning.

Diesel users have been spared a price rise for now, but Road Transport Forum chief executive Tony Friedlander is pessimistic about their chances of escaping for much longer.

BP spokesman Neil Green blamed a surge in oil prices to US$67.40c ($96.40c) a barrel on an unseasonal storm in the Caribbean, which could exacerbate an unexpected drop in United States petrol stocks.

Mr Green said the storm heightened sensitivities caused by a generally tight margin between demand for and the supply of refined fuel.

Automobile Association motoring policy manager Jayne Gale feared price volatility would continue for a year or so, before extra refinery capacity became available.

She said motorists could only hope the strong kiwi dollar did not weaken before then, sending the cost of importing fuel even higher.

The oil industry is meanwhile guarded about whether prices will rise even further when more environment-friendly fuel arrives at the pumps in coming days.

New Zealand Refining yesterday celebrated the completion of its $180 million "future fuels" plant at Marsden Pt near Whangarei which will slash sulphur content in diesel from 500 to 50 parts per million and cut benzene content in petrol by 66 per cent.

Chief executive Dr Thomas Zengerly, whose firm is owned by the country's four main oil companies, said he "couldn't say" whether the fuel would cost more at the pump.