Whanganui petrol prices still being affected by lack of competition

Low-cost operators like Waitomo and NPD don't have a presence in Whanganui. Photo / 123rf

The cost of petrol in Whanganui has reached at least 20 cents more than equivalents in neighbouring New Plymouth and Palmerston North.

According to the Gaspy app, the cheapest Unleaded 91 in Whanganui on Tuesday morning was at Pak ‘n Save, at $2.57 per litre.

At Pak ‘n Save in Palmerston North, it was $2.37.

The cheapest fuel in New Plymouth was $2.33 at NPD Westown.

AA fuel prices spokesman Terry Collins told the Chronicle in February that a lack of competition in Whanganui’s fuel market played a part in prices.

That was still the case in December.

“The more service stations, the cheaper the price,” Collins said.

“Fuel is a volume game, and they will charge what the market will sustain. When you get a large market and many start undercutting to maintain volume, others have to follow suit - otherwise they lose sales.

“That applies to all businesses, really.”

Lower-cost companies such as NPD and Waitomo aren’t in Whanganui, but operate in Palmerston North and New Plymouth.

A Waitomo spokesperson said it had installed five new stations this year, but it wouldn’t be coming to Whanganui in the near future.

“We are always looking for new sites, but there are no firm plans for Whanganui on our radar at the moment.

“It’s a matter of finding the right site and going through the consenting processes.”

AA's Terry Collins says it's hard to tell what will happen with petrol prices heading into the new year.

When low-cost operators like Waitomo come into a region, it does have an impact on pricing, the spokesperson said.

“We were the first low-cost operator to move into the Wellington region, where prices had been historically really high.

“Now, prices have dropped between 20 to 30 cents a litre across all the brands as a result of us coming to town.

“Others followed after us, and that’s the type of competition we like to see.”

Due to current geopolitical circumstances, it was very hard to predict what would happen to fuel prices heading into the new year, Collins said.

“Pundits like Bloomberg have been quite aggressive, saying we could be up to US$100-110 a barrel [of oil] in the first quarter of next year.

“If it got to US$110, that would add another 25 cents to a litre of fuel. If the Government puts its other 25 cents back on, it would be 50 cents, then there’s GST of another 7.5 cents.

“All of a sudden, you’re getting close to that $3 [per litre] mark again.”

At this stage, the Government’s fuel tax cut, which knocks 25 cents a litre off prices, will end next month.

The newest player in the Whanganui market is Mobil, which opened in Whanganui East earlier this year.

Unleaded 91 was $2.63 there on Tuesday morning, the fourth-cheapest in the district.

Its counterpart in New Plymouth was selling 91 for $2.52.

A Z spokesperson says prices are determined by head office, not by individual stations. Photo / Bevan Conley

Global market fluctuations, shipping and freight costs, the price of carbon and local competitive pressures were some of the factors that impacted the cost of fuel at the pump, a Z spokesperson said.

Prices were set by head office, not by individual stations.

Z Dublin Street was charging $2.66 per litre on Tuesday, with Z London Street at $2.69.

In Palmerston North, fuel at Z Ferguson Street was $2.61.

“Z reviews its pricing daily and makes up to 50 price changes a day outside of any nationwide move. Z’s fuel pricing is localised,” the spokesperson said.

“Prices can be different at service stations within regions or even the same towns, based on a range of factors such as varying property overhead costs or local competition.

“Z is also the wholesale fuel supplier to the network of Caltex-branded service stations. Prices at these service stations are set by local retailers.”

On Monday, the price of 91 at Caltex Victoria Avenue was $2.66 per litre, while at Caltex Tremaine Avenue in Palmerston North, it was $2.53.

Collins said he would always advise using fuel cards and accumulating savings.

“One example is the AA fuel card, which does 10 cent discounts on Wednesdays and allows you to accumulate that for two weeks if you buy $40.

“Buy $40 worth and save your 10 cents, then go and load another $40 on if you can afford it and get another 10 cents. That’s a 20 cent discount.

“Keep saving those as much as you can, for as long as you can, and sometimes you’ve got $1.20 worth of fuel discounts. That could be $50 to $60 of petrol you’ve saved.”

When asked for comment, BP New Zealand provided the Chronicle with the same statement it sent in February.

“There are a number of factors that influence prices. We continue to review bp Connect prices every day to ensure competitiveness in the market.”