Small towns may feel worse fuel pain

Higher fuel prices could hit smaller towns in the South harder, the Automobile Association says.

Fuel prices have skyrocketed around the country as Russia, the second-largest global oil producer, invades Ukraine.

The cost of a barrel of oil has risen dramatically in the past week to just over $US100 ($NZ148), and some forecasters predict it could hit $US120.

Late yesterday afternoon, fuel price-tracking app Gaspy showed the average price for 91 octane petrol in Otago and Southland was $2.73 a litre.

That was up 8.7% compared with the middle of January when the average for 91 in the two regions was $2.51 a litre.

Yesterday, the cheapest fuel was at Dunedin’s NPD self-service site in Andersons Bay at $2.58 a litre.

The dearest was BP Connect Queenstown, at $2.95 a litre.

AA fuel price spokesman Terry Collins said Otago and Southland would not be any worse off over rising fuel costs than other regions.

"The regional difference is not a glaring anomaly."

But smaller towns in the South should expect to see higher prices compared with the main centres, he said.

Those smaller towns had to put up their prices to cover larger overheads, such as transportation costs.

"That is why they will see higher prices in those places and not bigger centres like Dunedin."

The average cost of owning a car for South Island motorists had gone up 19% to about $10,000 in the past year, driven by rising fuel costs and rising parts costs caused by global shipping delays, Mr Collins said.

That compared with 17% for North Island motorists.

The average South Island household was spending about $4000 a year on fuel.

"It is heading up, fuel today will be cheaper than fuel tomorrow," Mr Collins said.

Waitomo Group general manager Jimmy Ormsby said Russia’s invasion of Ukraine had caused another, much faster, hike.

The group, which operates two Dunedin petrol stations, based its prices on rolling averages.

He said the global oil price would likely keep rising as the violence worsened.

"Fuel you buy today’s going to potentially be cheaper than what it’s going to be tomorrow, so we’ve been trying to keep all our tanks full."

The Government last week reassured New Zealanders the country did not rely on Russian oil.

Prime Minister Jacinda Ardern said New Zealand’s imports of Russian oil historically had been limited to "about 20%", and Z Energy for example had not purchased any in the last six months.

"Our fuel supply tends to be dominated by [the] Middle East and Asia," she said.

Massey University energy specialist Emeritus Prof Ralph Sims said in New Zealand dollars, "for every dollar price rise of the world oil price, in rough terms, then there’s an extra cent per litre on the purchase price at the pumps". — Additional reporting RNZ


$1.80 in Brisbane. Outrageous! lol.

This is exactly the argument why many New Zealanders tried to persuade the Gov't and Green party to at least keep marsden point oil refinery in Gov't hands and in operational condition, even if it did only inject 20% into supply. That 20% could save our essential transport a whole lot of vulnerability to offshore events. But alas no, our food transport and emergency vehicles, fire and Ambos, trains and public transport whom have all yet to be kitted out with alternatives are at the perils of grinding to a halt if the real madness hits the high seas in getting these essential commodities to our shores!