AA says petrol prices competitive

Petrol prices again made the press around the country last month, with the Automobile Association (AA) saying it is very possible that prices could hit $3 per litre for 91-octane fuel this year.

AA principal advisor, Terry Collins, points out that prices for 98-octane have already reached $3 per litre on the Hibiscus Coast, and wider Auckland, at some outlets. 

He says the price of getting petrol into the country, which includes refining, oil and shipping costs, is the highest it’s been in a year due to international supply and demand and the effects of Covid-19 on this.

Collins says prices on the Hibiscus Coast could reflect an attitude by suppliers that it is a relatively affluent area. However, he says prices locally are only a little bit dearer, or equal to, prices in Auckland city. 

He says there is sufficient competition locally – it’s a matter of checking prices and shopping around. He recommends the fuel data app Gasby for this.

“When I recently looked [at Gasby], there was a 36c difference between the highest and lowest prices for petrol (and 40c for diesel) within a 20km radius of Ōrewa,” Collins says. “I would say that is competitive.”

There are a few shifts in the marketplace that could impact consumers. The purchase of Caltex owner Chevron NZ’s assets by Z Energy in 2016 means since then, Z has been the wholesale fuel supplier to Caltex-branded service stations.

Australian petrol company Ampol is currently seeking to purchase Z Energy. It already owns Gull, which has petrol only stations that keep the cost to consumers competitive. 

Ampol’s offer is currently before the Commerce Commission – the company is expected to be required to sell Gull should it be allowed to acquire Z.

Collins says if this happens, a lot will depend on who purchases Gull, and whether they wish to continue the low cost model.

Local options The cheapest price per litre for 91-octane that we could find on the Coast at the time of writing was $2.55 (at Gull Millwater and Pak ‘n’ Save Silverdale) while the most expensive was $2.82 (BP Dairy Flat).

Electric impact
The AA’s Terry Collins says the emergence of electric vehicles will be an increasing factor in petrol costs.
“Currently electric powered vehicles are exempt from road user charges, so as more enter the fleet, it will have an impact. To disincentivise the use of petrol, government may increase the Emission Trading Scheme levy – this may constantly go up.”
Collins says with this in mind, anyone who needs to replace a vehicle should not only look for the safest and most fuel efficient option that they can afford.
“It’s important to consider the total cost of owning that car, over its lifetime,” he says, “including maintenance, repairs and fuel costs, which can make electric cars more attractive.”
He says the AA expects the cost of buying electric vehicles will reach parity with petrol-powered vehicles by the middle of the decade, then begin to favour electric.