Waitomo Petrol's new no-frills station could push down prices at Palmerston North pumps

Tuesday, 25 July 2017

Waitomo Petroleum has begun work on a new self-service station on Tremaine Ave in Palmerston North. It's expected to open in mid-August.

A new no-frills service station in Palmerston North is expected to put pressure on other service stations to cut fuel prices.

Waitomo Petroleum has begun building a new self-service petrol station on the corner of Tremaine Ave and Roy St, at the site of the old Libertyland clothing factory next to Lychway Funeral Directors. It is expected to open in mid-August.

Waitomo Petroleum manager Paul Easton said it would be an unmanned station, like Waitomo's existing service stations in Bulls and Foxton.

'It gives us cheaper overheads, which we can pass on to the community with the lower fuel prices.

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'And we structure our prices so they're the same across the country, whether it's in Palmerston North, Pahiatua or Foxton.'

Self-service stations without the shop or a car-wash can be up to 12 cents cheaper than full-service stations.

Pricewatch.co.nz, which has daily updates on pump prices across New Zealand, showed the big four petrol station brands on an even footing in Palmerston North on Friday – Caltex, Mobil, Z and BP all had 91 unleaded at $1.83 a litre, and diesel at $1.11 a litre.

On the same day, Waitomo's prices were $1.75 a litre for unleaded and 99c for diesel.

Automobile Association senior policy adviser Mark Stockdale said when no-frills independent fuel companies such as Waitomo and Gull opened, it usually pushed down prices at nearby petrol stations.

'The other brands will be worried they'll sell less fuel, and they'll try and match the price. So everyone benefits, even if they don't want to go somewhere without a shop as well.'

The rise of self-service stations had been a substantial change for the industry. The only petrol station brands with national reach seven years ago were the big four, but now there were 21, Stockdale said.

The cost of establishing new petrol stations used to limit independent companies to their home town and surrounding areas.

But, with the introduction of pay-at-the-pump and cheaper technology, they could afford to expand.

For the most part, self-service stations popped up in rural areas and small towns, but now brands such as Waitomo were starting to move into the larger provincial centres, Stockdale said.