Fuel prices continue to fall
Friday, 10 April 2020
As New Zealand enters the second half of the lockdown, fuel prices have plummeted.
According to the Ministry of Business, Innovation and Employment, the average price for petrol in Auckland has dropped from around $2.28 per litre at the start of 2020 to $1.83 as of April 3.
Data for the rest of New Zealand puts the average price at the start of January at $2.15 and $1.70 on April 3.
Diesel costs started the year at $1.55 and are now sitting at $1.18 in Auckland. The rest of New Zealand went from $1.41 to $1.05.
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These figures are when various discounts are applied. Add roughly 20 cents for the full pump price.
For both sets of data, prices have remained more or less at that point since March 20, just before we went into lockdown. The last time prices were that low for a similar amount of time (at least two weeks) was in July 2017, then August 2016 before that. Both of these events didn't last, with pump pricing steadily rising in the following weeks.
This is largely due to rapidly declining demand as people across the country use their vehicles less.
Indeed, data of weekly traffic flows in Auckland, Wellington, Christchurch, Hamilton and Dunedin shows that, compared to the previous year, traffic is down between 74 and 82 per cent.
The MBIE figures show the bulk of the price reductions are coming from lower importer costs, with a little tax break involved. However, importer margins are up, probably as a result of those relaxed taxes.
According to the AA's March 2020 petrol and diesel prices report, since the beginning of the year the landed cost of petrol has fallen roughly 43 cents per litre with the national pump price dropping 46cpl in that time.
By contrast, the landed cost of diesel has fallen 35cpl since 1 Jan and national pump prices are down 36cpl.
Stuff reached out to Mark Stockdale, AA's PetrolWatch Spokesperson who said that, going forward it's 'hard to say what might happen. But after a spate of price cuts in the first half of March, things have been pretty stable at the pump in the last few weeks.
'Globally, commodity prices have stopped falling and in the past week have actually risen again. So we've probably seen the best of it in terms of price cuts and they might settle down for a little while until countries start coming out of their lockdowns and travel increases again.
What does that mean for us? Well, we can either take advantage of the low prices while they last and risk fuel going off if the level four lockdown is extended or hope prices don't rise too much when the lockdown does lift.