One of New Zealand's smallest fuel providers is slashing 12 cents a litre off fuel for 29 hours as petrol prices soar to record highs.
A huge discrepancy in petrol prices across the North Island, including the Auckland region, is being driven by the "Gull effect" - which the AA said is creating "outrageous" and unsustainable pricing.
As national petrol prices reached new heights this week, hitting $2.30 a litre, the Herald has compared the going rate among the super city's petrol stations.
The price of 91 has risen by nearly 20c a litre since January when it was $2.12 a litre and climbed past the previous high of 2013 when it was $2.27 a litre.
But yesterday, Gull dropped fuel prices by 12 cents per litre, starting a price war.
The promotion would run until lunchtime on Friday. It separated the cheapest and the most expensive fuel across the country by more than a dollar.
Prices gathered through the fuel price comparison app Gaspy showed Auckland's lowest-cost fuel stations were Gull in Titirangi and Millwater where customers would pay just $1.87 at the pump.
Gull stations in Wellsford, Papakura, Wiri, Papatoetoe, Takanini and Onehunga were also selling 91 at cut prices only a few cents more than Titirangi and Millwater.
Petrol stations out by the airport would hit Auckland customers in the pocket, charging $2.29 a litre, while both Z and BP 2go stations on Waiheke Island charged a whopping $2.50.
But, the country's cheapest petrol was further down the country, at a small Gull petrol station on State Highway 1, between Rotorua and Taupō.
Gull Atiamuri was charging $1.807 a litre for 91, $1.957 for 98 and $1.107 for diesel through until midday tomorrow.
Robbie and Nikki Hooker live in Kinloch, but were regular visitors to the Atiamuri station, half an hour up the road.
"We've just come through Tokoroa and we saw $1.16 for diesel, and we thought, 'Do we risk it', but I said 'No, Atiamuri will be cheaper'.
Nikki and Robbie Hooker were cheering as they saw the low cost of diesel in Atiamuri this morning. Photo / Ben Fraser
"As we came down the hill and saw $1.10 I was like 'Yes'," Nikki said cheering.
The couple said it was definitely the cheapest they had seen it for quite a while.
In New Plymouth, the price war was obvious too with Gull advertising 91 octane for $1.87 while Caltex and Mobil were not far behind on $1.89 and $1.91 respectively.
The AA's Mark Stockdale attributed the huge amount of competition to the presence of brands like Gull, with lower overheads than the bigger brands, expanding across the country.
"The higher the margin, the more attractive it is for these smaller brands to expand," Stockdale explained.
"They see the high margins that the bigger places are making and they want a slice of that action.
Stockdale said the "Gull effect" often meant prices would stay lower in areas with cheap suppliers like Gull, as other outlets fought to stay competitive.
However, Stockdale called fuel prices as low as $1.87 "unsustainable". Taking into account the cost of raw petrol and taxes, he said outlets could not stay profitable with prices that low.
"Marketing tactics like that are just trying to entice customers and create loyalty," he said.
Mobil on Ormiston Road and BP Connect in Flatbush were selling fuel at $1.89 this evening - just a few cents below the Gull outlet in the nearby East Tamaki area.
Because Gull was a discount supplier it favoured setting up shop in lower-cost parts of the city and avoided areas with higher rent, Stockdale said.
"If you're a low-cost brand you need to operate in low-cost areas."
Generally, petrol prices to the north and south of the super city's boundaries hovered between just under $2 and $2.15 a litre.
In south Auckland, 14 petrol stations across Otara, Otahuhu, Takanini, Onehunga, Papakura, Papatoetoe and Manurewa were selling 91 for under $2 a litre, making up nearly half of the 31 petrol stations we found selling under that threshold overall.
Meanwhile, petrol stations in inner city suburbs like Ponsonby, Newmarket, Mt Eden, Point Chevalier and Herne Bay were all selling 91 between $2.20 and $2.24 a litre.
Across the Harbour Bridge and beyond in Silverdale, Whangaparoa and Matakana, the majority of petrol stations were selling 91 for $2.17 or $2.18 a litre.
In nearby Orewa prices were much cheaper - $2.03 at Caltex and $1.87 at Gull.
