Record fuel prices seen as 'greedy'

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 1980s.

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 greedy."

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 as possible."

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



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