Diesel shortage 'big issue' for Kiwi motorists

Fuel prices on display in Swanson Rd, Auckland. Photo: Michael Craig
Fuel prices on display in Swanson Rd, Auckland. Photo: Michael Craig
An international shortage of diesel has become a "big issue" for Kiwi motorists, boaties and farmers.

Across the world the price of fuel has risen dramatically this year, and AA principal policy adviser Terry Collins told The New Zealand Herald some service stations in Wellington were selling diesel at $3 a litre.

Collins said the diesel shortage has been compounded by a surge in demand in Europe, which has more light diesel vehicles, as they seek to replace Russian oil.

As well as this, he said refining costs were higher for diesel than petrol.

Collins told the Herald that with air travel expected to increase, prices won't get any better, as both diesel and Jet A1 were middle distillates, which is a type of refined petroleum product.

"It's not local companies profiting, it's international suppliers making great returns.

"We are currently at US$120 a barrel so possible more pain to come. JPMorgan's chief executive thinks oil prices could surge to $175 a barrel later this year. Goldman Sachs thinks oil prices will "average" $140 a barrel in the third quarter of this year."

New Zealand fuel reporting website Gaspy shows the average price of diesel in monitored stations is $2.80 a litre today, whereas unleaded 91 petrol was going for $3 a litre.

Federated Farmers national arable chair Colin Hurst said it was "just amazing" how much the price of diesel had increased recently.

"It's almost the same price of petrol, to tell you the truth. It never used to be, so I'm really wondering what the hell is going on."

This, he said, meant farmers were having to pay more to get the same job done.

While fuel was a big cost to farms, he said it wasn't as much as the likes of fertiliser, interest rates or the cost of labour.

"The thing about fuel is it touches everything, everything that we buy, it's got to be transported either to bring it offshore, or from the factories."

Some Kiwi boaties are also suffering.

Ben Chissell, founder of the Facebook group NZ Fishing Community, told the Herald the cost of diesel had tripled in less than two years.

He said the price was making people go out on their boats less.

"A year ago I'd happily go out on the boat myself or take my son and it would be $150 bucks, maybe 200 bucks, something like that. Now going out doing the same trip is $550, $600 bucks."

Now he said people had to bring more people with them to split the bill.

"My boat is now over $2000 to fill, whereas 18 months ago it was $700 bucks."

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