KEY POINTS:
The 16th consecutive petrol price drop since July is more good news for motorists in the lead up to the summer holidays.
This morning Shell dropped 91 and 95 octane prices 5c a litre to $1.43.9c and $1.48.9c respectively. BP, Gull and Caltex followed soon afterwards.
Diesel remained unchanged at $1.20.9c.
It was the sixth price decrease in petrol this month and the 16th consecutive drop since July 17 when it was around $2.19 a litre.
Automobile Association spokesman Mark Stockdale told NZPA it was all good news for motorists.
New Zealanders were seeing lower pump tallies as international petrol price fell faster than the New Zealand dollar.
Once the New Zealand dollar stabilised it could be more good news as the kiwi would be able to buy more in US dollars.
It couldn't come at a better time for drivers hitting the road for the summer holiday period, he said.
The 75 cent drop since July's high prices was not unexpected.
Mr Stockdale said it was acknowledged at the time that the high price was not sustainable and was a result of commodity speculators.
Since the global financial crisis had spread speculators had pulled their funds and the price was now being set by the market and because demand was falling, so were prices.
However, the oil producing countries of Opec were already talking about reducing production which could drive the price up, he said.
"We don't know when it will hit bottom, but eventually it will bottom out."
Meanwhile, diesel prices had not dropped internationally because there was still strong global demand.
Diesel demand was less volatile - diesel driven industries could not reduce consumption as easily as motorists could, Mr Stockdale said.
International prices for petrol had dropped 50 per cent since the start of the year, compared with just 35 per cent for diesel, he said.
Diesel was also used as a source of energy and demand would increase worldwide as the northern hemisphere went into winter.
A spokesman for the Road Transport Forum, which represents trucking and other transport companies, said the latest drop in prices did not really affect the industry.
With the current financial pressure it was still very difficult for transport companies.
- NZPA
