Gull chops petrol by 21c for 21st birthday

Thursday, 24 October 2019

RNZ’s podcast The Detail looks at the petrol industry.

Gull has cut the price of petrol by 21c per litre to mark its 21st birthday.

The retailer said the discount would apply from 7am Thursday until midday Friday, at all Gull sites.

According to price comparison app Gaspy the current average fuel price across the country is $2.16 a litre for 91 and $1.46 a litre for diesel.

It said the cheapest price for 91 was at Gull Atiamuri, where it is $1.70 a litre.

* What we are paying for when we buy petrol

* Petrol pump price drop not keeping pace with oil fall**

Co-founder Larry Green said it was a good deal for consumers.

'Christmas has come early, it's excellent. Most people re offering 6c off if you jump though a variety of hoops and shop at a certain place but Gull is doing 21c. It's great for Kiwis.'

Gull is cutting prices over Thursday and Friday.

As part of its review of the petrol market, the Commerce Commission said the rise of petrol discount schemes could be a symptom of high margins.

'In the past there have been periods of strong competition on board prices. However, in more recent years resellers have increasingly competed using discount and loyalty programmes and by offering different levels of service.'

But the commission, which released its report into competition in the petrol market, found the rise of 'discounting' was closely linked to rises in importer margins on fuel, had the effect of sorting consumers into more and less price sensitive groups, and made it harder for people to compare the actual prices.

But Green said these sorts of offers could be seen as marketing.

'Obviously when you put a 21c discount on your product everyone is looking at Gull in a positive way… you could pretty much say it's in the marketing budget.'

He said big discounts tended to be short-lived.

'On the app today and on social media there's a lot of excitement about Gull but tomorrow it'll be all over.'

Gareth Kiernan, chief forecaster at Infometrics, said importer margins were at 25c per litre so Gull would probably only just break even with its discount.

'They wouldn't want to be going at that price forever.'

He said margins took a hit after the attack on Saudi Arabian oil facilities and dropped to their lowest level in percentage terms since 2014.

But they had since rebounded to something more like normal for recent months.