Sharply lower oil prices have put more downward pressure New Zealand petrol and diesel prices, but further falls are not expected to occur in the leadup to Christmas, the Automobile Association said.
The association said fuel prices today fell by 2 cents a litre, led by Z Energy, building on another 2c reduction that occurred last Friday. At current prices, fuel is at its lowest point since February, AA Petrolwatch spokesman Murray Stockdale said.
"This is mostly due to further reductions in commodity prices, and a slight strengthening of the NZ$ which is back over US67c for the first time in a month," Stockdale said. While oil prices have fallen to US$40/barrel - almost the lowest since January 2009 - the commodity price for petrol ws US$63/barrel.
The last time refined fuel commodity prices were this low, petrol prices were $1.73/litre (diesel $1.07/litre), but allowing for the reduction in the exchange rate since then, the imported cost of petrol is 8c higher today while GST on the higher price adds another 3c, Stockdale said.
The association said the national fuel price for 91 Octane petrol was 189.9c/litre and 198.9c for 95 Octane. Diesel is at 114.9c/litre.
"This time last year, retail prices were $2/litre (and diesel $1.32/litre), but we're not expecting big reductions in pump prices like we had last Christmas, mainly because oil prices are already down at the levels they fell to last December-January," Stockdale said.
On the international markets, oil prices were at their lowest level in more than six years amid speculation that a record global glut will be prolonged after OPEC effectively abandoned its long time strategy of limiting output to control prices.
The Organisation of Petroleum Exporting Countries will keep pumping about 31.5 million barrels a day, President Emmanuel Ibe Kachikwu said on Friday.
OPEC is setting aside its output quota of 30 million barrels a day, a target it's breached the past 18 months, until members gather again in June.
Bloombreg reported West Texas Intermediate for January delivery sank US$2.32, or 5.8 percent, to settle at $37.65 a barrel on the New York Mercantile Exchange, the lowest close since February 2009.