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Motorists gained some sorely needed relief yesterday, after world oil prices plunged below US$70 ($114) a barrel - and then rose by almost US$3.
Petrol tumbled by 8c a litre, and diesel by 6c for a second day in succession, after pressure built on oil companies to drop their retail prices in line with the global economic crunch.
Although diesel prices fell 6c on Thursday, the Herald set the agenda yesterday morning by reporting that petrol was still 30c a litre more expensive than the last time crude oil was so cheap, in September last year.
Oil companies blamed the relative weakness of the New Zealand dollar, which has lost about 9c against the United States greenback since then, and the high cost of refining crude.
But after an overnight fall of almost US$7 ($11) a barrel for refined petrol imports, Mobil led a round of retail price cuts, which were leapfrogged by Shell and then the other oil companies.
Mobil initially cut its petrol and diesel prices by 4c a litre, but had to play catch-up yesterday afternoon after the others dropped theirs by 8c and 6c respectively.
That left the big four oil companies selling 91-octane petrol last night at main-centre pumps for 181.9c a litre, and diesel for 135.9c.
Gull's prices were 1c lower for its regular grades, and 3c for its 91-octane bioethanol-petrol mix.
Shell spokeswoman Kylie Reeves said that although crude oil prices had fallen steadily in recent days, it had taken time for that to flow through to refined costs.
"The Kiwi dollar has also stabilised over the last couple of days, helping us to pass on this significant saving to motorists," she said.
But Automobile Association spokesman Mark Stockdale, while welcoming the cuts, warned motorists not to count on the dollar holding.
He praised the suppliers for being prompt to pass on the cost savings for refined product, especially as summer was approaching and people were under pressure on other cost fronts.
"It's great news and the companies need to be commended for acting so promptly, but we have to hope the dollar doesn't stay down," he said.
Mr Stockdale did not believe the cuts would cause motorists to relax efforts towards greater fuel efficiency.
"I don't think so - I think motorists recognise higher prices are here to stay because the long-term trend is for international demand to keep growing."
