Petrol prices in New Zealand are yet to return to levels experienced prior to an air strike on a Saudi Arabian oil facility a month ago.
On September 15, drones were used to attack oil processing facilities in eastern Saudi Arabia causing the price of Brent crude, one of two global benchmark prices for oil, to jump US$6.45 (NZ$10.23) to trade at US$66.67 a barrell (159 litres).
In response BP and Z Energy increased the price of petrol and diesel in New Zealand by 6 cents a litre. The petrol companies said the hike was due to the Saudi attacks and currency movement. The New Zealand dollar had softened against the US at the time.
One month on from the attacks and New Zealanders are still paying more for petrol despite oil prices dropping below pre-attack levels weeks ago. On Saturday Brent crude traded at US$60.69.
Larry Green from petrol price comparison app Gaspy said before the attack the national average price of 91 unleaded in New Zealand was $2.16.
After the attack it spiked to $2.22. On Monday the national average was $2.19.
Green said petrol companies were quick to hike their prices in response to the attack but slow to return them to pre-attack levels.
“Price rise very quickly and are very slow to come down,” Green said.
Z and BP said there were a number of factors that influenced the price of fuel, oil prices being just one of them.
Z spokeswoman Victoria Crockford said its prices were determined by a range of factors that changed daily, including but not limited to the cost of crude oil, foreign exchange rates, the cost of transport, the cost of site infrastructure and maintenance and local competition in the area.
“So, while Brent Crude is a natural indicator for people to look to, and one we use in our overall equation, it is by no means a ‘cent for cent’ process in terms of our everyday pricing – neither when prices go up, nor when they go down,” Crockford said.
She said the cost to freight crude oil from the Middle East to New Zealand had increased up to 3 per cent off the back of US sanctions on Iran that implicated a large Chinese shipping company which shipped 3 per cent of global freight.
BP spokeswoman Anna Radich said its prices were reviewed every day to ensure they were as competitive as possible.
BP explains fuel pricing on its website.
AA petrol spokesman Mark Stockdale said tracking petrol price movements was difficult because there was such variation across the country.
“There’s just so much regional price disparity,” Stockdale said.
“The market is much harder to monitor than it used to be as a result of the increasing level of price competition within regions and between regions.”
In some parts of the country prices hadn’t changed since before the Saudi attack, he said.
The price of refined petrol was disparate from the commodity price, he said.
“It’s much more closely linked to competitive behaviour.”
The Ministry of Business Innovation and Employment carries out weekly monitoring of importer margins for petrol.
The importer margin is the gross margin available to fuel retailers to cover domestic transportation, distribution and retailing costs in New Zealand, as well as profit margins.
The provisional weekly average importer margin for the first week of October was 27.62 cents per litre, compared to 27.95c per litre a month ago, showing margins had dropped slightly since the Saudi oil strike.