Motorists are feeling the pinch from record high prices at
the petrol pump, with the cost of 91-octane fuel at stations
surveyed in Otago ranging from 219c to 229.9c per litre.
The rise has made most petrol 1c a litre more expensive than
at the previous high in May last year.
It has left economists such as Robin Clements, of UBS New
Zealand, fretting about the effect on household spending
through the fragile financial recovery.
"Petrol is such a pervasive product - it is like a tax - it
will crowd out other spending," he said.
Although the price of petrol has soared to its highest level,
an academic says it is still cheaper than it was in the
A senior lecturer in economics at the University of
Canterbury, Eric Crampton, said petrol was actually more
expensive in 1981.
"Back then, petrol prices were less than 60c a litre. While
that sounds wonderful, when you adjust for inflation, that is
$2.46 per litre in today's dollars ...
"Also, people now buy cars that are far more efficient than
the ones available even a decade ago, so the cost of driving
per kilometre has not risen as substantially," he said.
Oil companies are blaming the increase on greater economic
confidence overseas - in both the United States and Europe -
as well as perennial tensions in the Middle East.
AA spokesman Mark Stockdale said after a succession of cuts
in May and June, petrol had risen by 26c a litre in the past
six weeks because of rises in international commodity prices,
fuel tax and oil company profit margins.
Motorists in Dunedin, where 91-octane fuel was selling for
$2.22.9 at most petrol stations, who spoke to the Otago
Daily Times were all alarmed by the latest increase.
Glenda Harris said she was "sick of" of petrol price rises,
which meant she had less to spend on other things.
"It just keeps going up and up and up," she said.
Penny Fisher, of Karitane, said fuel prices were "ridiculous"
and would stop her driving into Dunedin unless she had to.
Kate Lindsay said prices were "an absolute disgrace".
"I just think if ... [the petrol companies] were already
making a good living ... then don't put prices up, it's just
Glenavy resident Kelly Wilson said with it now costing $120
to fill up, she needed to use supermarket petrol vouchers
"more and more".
"We have to - it really takes a lot off the price."
Despite the surge in petrol prices, service stations in
Balclutha were busy yesterday, although one attendant said
the past few days had also been busy, which was attributed to
the warm weather.
Otago Regional Taxi Federation representative and Dunedin
Taxis director Murray Alcock said the high prices meant taxi
drivers' margins would take a hit.
For the moment, taxi drivers would "absorb" the cost and
would not be raising fares, Mr Alcock said.
"As in the past, taxi drivers are monitoring it and the
general consensus in our company is that we absorb it as much
St John South Island regional operations manager Chris Haines
said the record price of petrol would have a "significant
impact" on its business.
"If it becomes too much of a pressure, we will have to look
at where we can save money in other areas," Mr Haines said.
- additional reporting Staff Reporters/APNZ