A South Korean navy destroyer has caught up to a supertanker carrying about US$160m of oil believed to have been hijacked by Somali pirates.

Shell, BP, Mobil and Gull have cut petrol prices by up to five cents a litre ahead of the long weekend.

Shell's NZ petrol stations are now locally owned, with Infratil and the Super Fund saying that a large chunk of profits will stay in NZ.

Infratil and the NZ Super Fund says they have finalised the purchase of Shell New Zealand in a $696.5 million joint venture deal.

If Govt projections over our petroleum sector bear fruit, NZ could be the oil sheikhs of the Pacific, writes Fran O'Sullivan.

Increased demand for oil from China coupled with a global shortage of oil refineries has sent petrol prices to a 16-month high.

Petrol hikes which lifted prices to their highest level in 18 months today have sparked concern from the AA and politicians.