After a weekend of skyrocketing prices on the back of the Ukraine conflict, Prime Minister Jacinda Ardern cut fuel taxes by 25c a litre on Monday for the next three months.
According to fuel tracking app Gaspy, the average price for 91 octane yesterday morning throughout Otago and Southland was $2.88 a litre, down 12c on Monday’s average of $3 a litre.
The most expensive in the morning was BP 2go Cromwell at $3.18, but by late afternoon its price had dropped to $2.92 a litre.
One of the most significant drops was Dunedin’s Challenge Fitzroy, which dropped from $3.02 in the morning to $2.68 by the afternoon.
By the end of the day, the average price was $2.82 a litre.
Automobile Association fuel spokesman Terry Collins said there was a big variation between the highest and lowest prices at pumps throughout the country yesterday and he expected the 25c cut to be caught up in that.
Some smaller stations would have been slower to reduce prices because they had limited storage and had already purchased fuel at the higher cost.
Brent crude oil — which influences fuel prices — fell to its lowest level in nearly two weeks, down 5% yesterday to $US106.90 a barrel amid hopes for progress towards a diplomatic end to Russia’s invasion of Ukraine.
The International Energy Agency indicated yesterday it did not expect oil prices to be under $US100 a barrel until at least sometime next year.
Given that, Mr Collins said fuel prices would be floating around $2.50 to $3 for "quite some time yet".
Z Energy — which also owns Caltex — confirmed that it lowered the price of petrol by 25c across its network.
Z had also reduced its wholesale rate of petrol to its Caltex retailers in line with the excise reduction, but as Caltex retailers were independently owned and operated they made their own decisions regarding pricing, Z Energy said.
BP had also implemented the changes across its network before the midnight deadline.
The company continued to review its prices every day to ensure competitiveness in the market, a BP spokesman said.
Energy Minister Dr Megan Woods told Parliament yesterday she had asked Ministry of Business, Innovation and Employment officials to follow up on any concerns raised by consumers about the tax cut not being past on.
Dr Woods encouraged consumers to shop around to get the "best deal at the pump".
Gull NZ general manager Dave Bodger said the reduction was a "game changer" and "huge for the public".
As a general rule he said a dollar a barrel amounted to a cent per litre, with a cent on the freight exchange amounting to a cent per litre.
He said things would get better if there was peace in Ukraine, whereas escalation would be bad news for fuel prices.
"For those of us old enough to remember the Gulf War, it went through the roof and then it recovered afterwards," he said.
"Let’s hope it’s the same this time." — Additional reporting The New Zealand Herald
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Does Z Fuel support Russia in the current conflict? I wonder if a name change is on the cards. They could change it to U Fuel in support of the Ukraine. Or that fact that U will still be paying silly amounts for fuel in NZ.