“Fuel price comparisons with townships neighbouring Ruapehu suggest a lack of true competition within our retail fuel outlet operators,” Kirton said.
An example was Taumarunui, where people were frustrated over significantly higher prices than neighbouring towns like Te Awamutu.
The price of fuel in Te Awamutu was consistently between 40 and 42 cents cheaper than in Taumarunui, with the gap growing to as much as 46 cents over the last month.
“With the current cost-of-living crisis, we need to ensure we have reasonable and competitive pricing for essential commodities such as fuel,” he said.
A Commerce Commission New Zealand spokesperson said its fuel manager has been in touch with Kirton regarding his concerns.
Under the Fuel Industry Act, fuel wholesalers and distributors have to provide information to help the commission monitor and report on the competitive performance of the fuel market, including if signs of competition are improving.
Drivers of price variation were complex and could be influenced by a range of factors including levels of competition, capital or operating costs and consumer behaviour.
The commission said it was in the early stages of fuel monitoring, having published two quarterly reports in 2022 with a third due shortly.
Those reports focused on market dynamics in the five largest cities in the country, but further analysis would be done to better understand price variation in the regions, in particular.
New Zealand Automobile Association spokesman Terry Collins said competition, or a lack of it, was the main factor driving price disparity across the regions.
“What we’ve noticed is the more service stations within an area, the sharper the prices are because they’re all competing for that same volume of fuel,” he said.
The business model a station operated under also had an effect on its prices.
“What we’ve got lately is a lot of low-cost metrics coming into the market, places like Waitomo, NPD, Gull ... and what they do is put out a simple model of a forecourt, a card reader and you drive up and fill yourself up.”
He said those stations had lower overheads than fuller service stations such as those operated by Z or BP, which resulted in a difference in pricing models.
Whanganui District councillor Michael Law has been monitoring the issue of fuel prices in Whanganui and has similar concerns to Kirton.
Earlier in the year he collected a month’s sales data from major fuel brands and found on average an extra 25 cents of profit was being made in Whanganui. Not all was due to the stations’ prices being dictated by a national office.
Reducing this profit margin would result in an average saving of $10 per family, he said.
“You have people where $10 is the difference between them buying cheese or not buying cheese for the week,” Law said.
Whanganui District Council chief executive David Langford said after the release of Law’s data, the council got in contact with fuel supplier Waitomo to see if it was interested in establishing a station in Whanganui.
Waitomo is a fixed-price retailer, meaning its prices for fuel do not change by location, with its 91 octane fuel currently priced at $2.21 per litre.
Langford said as yet there was nothing concrete set up with the supplier.
“We’re still talking with them and, as a council, we’re concerned our community is not getting a good deal from the petrol stations at the moment,” he said.
“We want to see competitive prices, good value for money for our community, especially with the cost-of-living crisis going on at the moment.”
Law said a retailer like Waitomo establishing in the city would significantly drive down the costs of fuel.
“Case studies have shown that when a fixed-price retailer arrives in a city or town then the prices of everybody else become comparable,” he said.
In other centres, the arrival of fixed-price retailers had driven down the average price of fuel by 25 cents.
