Petrol prices soar towards $3 mark in Wellington, experts warn it's the new normal

Monday, 7 February 2022

The man behind the Gisborne iwi trust didn't realise it was the lowest price in the country, according to Gaspy, and said it was about providing a service to the community.

Petrol prices are soaring in Wellington, with some stations in Miramar selling a litre of 95 for almost $3. Is this the new normal? Ben Strang and Miriam Bell report.

Petrol prices are flirting with the $3 mark in Wellington, a figure motorists have labelled “ridiculous”.

A litre of 95 octane petrol cost $2.99 on Monday at Z stations on Miramar Av and at Wellington Airport, $2.98 at Z stations in Kilbirnie and Newtown, and $2.97 at BP on Adelaide Road, according the petrol price check app Gaspy.

If you drove to Pak ’n Save or New World in Lower Hutt, 95 dropped to $2.64 a litre, while Waitomo or Caltex on Hutt Rd was pumping at $2.71.

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Michaela Von Elders, at Waitomo petrol station on Monday, says petrol prices are “kind of ridiculous”.

In Auckland, prices have already gone past $3, with some stations selling 95 at $3.04, and 98 is on sale for as much as $3.07.

The highest price for 95 in Christchurch was $2.86 at seven stations. But the Gas in Ohoka, north of Christchurch, was selling 95 at $2.80.

The national average for 95 was $2.79 a litre on Gaspy on Monday, 21 cents higher than 28 days ago.

At Z on Miramar Ave, 95 petrol was 299.9 cents per litre on Monday. 91 was 283.9 cents.

Other fuel prices were also on the rise, with the average price of 91 petrol up 13c to $2.60, 98 petrol up 25c to $2.92, and diesel up 17c to $1.84.

Michaela Von Elders, who was putting petrol in her car on Monday, has been driving for two years, and has seen 91 petrol go from about $1.70 a litre to $2.55 a litre at the Waitomo self-help service station on Hutt Rd.

“You can’t really go out without spending $50 on petrol,” she said. “It’s kind of ridiculous.”

Natalie Stewart, who was also fuelling up at Waitomo, bought her first car a year ago, and had seen prices rise from $1.95 per litre.

The increases had meant she used buses more often than her car. “For young people it is really hard.”

Also at Waitomo was Graeme Taylor, who had spent the summer holidays travelling and had seen first-hand the variation of petrol costs around the country.

Graeme Taylor says petrol prices change by region, and by which part of Wellington you’re in.

He said provincial areas were often cheaper than the cities, and he found a significant price disparity in different parts of Wellington.

For instance, he said, you’re better off getting fuel in Thorndon than Miramar, with prices dropping by as much as 10 per cent.

The AA’s principal policy advisor, Terry Collins, warned last month there was a chance fuel prices could hit $3 this year, and the price could become the norm.

The key factors determining moves in the price of fuel in New Zealand were the duties and taxes applied domestically, and international prices, he said.

But price rises were also tied up with geopolitical issues and any developments with Covid-19.

“It’s very hard to predict, but I see at the end of the year prices being more than they are now,” Collins said.

While concern over high petrol prices prompted a Commerce Commission study in 2019, it had resulted in few tangible gains for motorists to date – although new competition rules which allowed independent petrol companies to expand their networks took effect last year.

But it was not just petrol prices that were on the rise. The inflation rate has jumped to 5.9 per cent, Stats NZ reported recently.

Consumer prices during the three months to the end of December put the annual inflation figure at its highest level since June 1990. And that was putting extra pressure on households with necessities such as food, housing and electricity now more expensive.

Infometrics principal economist Brad Olsen said costs were increasing across the board, and with 95 petrol breaking the psychological $3 barrier it would lead to families assessing their budgets further.

They would focus on funding the necessities of life, rather than the “nice-to-haves”, and that meant spending on non-essential trips in the car would be reduced, or cut, he said.

“Many people will stick closer to home and there will be less travel as petrol prices remain at these high levels.”

There was a risk international fuel prices could go up further if the Russia-Ukraine standoff escalated to warfare, he added.

“Although US shale providers tend to come online at this price level as it becomes worthwhile for them to supply, and that helps keep prices from getting too much higher.”

Correction: An earlier version of this story incorrectly stated that The Gas on Whites Rd in Ohoka, was in Christchurch. It also stated that the service station was selling 95 octane petrol at $3 a litre. The actual price was $2.80. Amended: 10.40am, January 8, 2022.