Petrol prices are set to rise next week to their
second-highest level ever - thanks to a Government tax hike.
Oil firms are expected to pass on to motorists the petrol
excise rise of 3c a litre to be imposed on Tuesday.
That follows a 2c increase at the pumps last week, which the
industry blamed on higher world oil prices caused by the Iraq
The Automobile Association said then that the high kiwi
dollar added only 1c a litre to import costs, and the
industry's profit margins were high enough for it to have
But some short-term relief is at hand for them from this
morning, when industry minnow Gull plans a brief spurt of
discounting which may spark competitive responses from other
suppliers such as BP.
Diesel prices will not be directly affected by next week's
tax impost, although consumers of that fuel face equivalent
rises in road user charges paid according to vehicle weights
Barring any major fall in overseas oil prices - unlikely
after Sunni Islamic rebels captured Iraq's big Baiji refinery
on Tuesday - the standard rate for 91-octane petrol is
expected to hit 223.9c next week and 95-octane fuel will be
8c higher than that again.
That will take prices to within 3c of a record of 226.9c set
last July for 91-octane petrol, and 234.9c for 95-octane.
A small blessing is that the AA expects the oil companies to
absorb the extra GST of almost half a cent on top of the
excise increase, as they did after a 3c tax rise in July last
It is encouraging motorists to take advantage of any discount
deals, such as will be offered by Gull from 7am today until
noon tomorrow, to fill up before the tax rise.
Gull will drop its prices temporarily by 10c a litre, to
reduce its top rate for 91-octane petrol to 205.9c a litre.
Z Energy would not flag what might happen to its prices
before Tuesday, except to say they would be reviewed daily.
Christine Langdon of Z confirmed its intention to pass on to
motorists the 3c excise rise, but said she assumed the
company would absorb the extra GST, as predicted by the AA.
"It is a government excise increase, so realistically it is
an increase consumers will pay at the pumps," the Z
Jonty Mills of BP indicated a similar response by his company
to the excise rise, although he said it had yet to decide
what to do about GST.
But he said BP would keep an eye on "competitive activity" by
other suppliers such as Gull in localised pockets around the
country and might respond in kind.
AA Petrolwatch manager Mark Stockdale acknowledged a
likelihood of a 3c rise next week.
But he said it would be a pleasant surprise if the oil
companies stopped short of that mark, given their high profit
Government figures from last week showed the industry was
making an average importers' margin of 29.9c a litre on
91-octane petrol, compared with 27.5c when pump prices were
at their highest last July.
The Government said excise increases, which will include
another 3c rise in July next year, are needed to shore up the
national land transport fund and extra spending on its "roads
of national significance" programme.