Petrol prices could near $4 as Iran conflict sends global oil soaring
Monday, 9 March 2026
Petrol prices could climb sharply in the coming weeks as global oil prices surge, with the AA warning motorists may eventually face prices approaching $4 a litre.
AA principal policy adviser Terry Collins said oil prices spiked when global markets reopened on Monday, jumping by more than 17% shortly after trading began.
Collins said the price had surged from around US$93 a barrel to about US$109 within minutes of markets opening.
If prices continue rising, he said, oil could soon exceed US$110 a barrel, which would mark the highest level in about four years, similar to the spike seen during the Russia–Ukraine war.
Before the conflict began last Saturday, crude oil had been trading at around US$72 a barrel.
A key concern for energy markets is disruption around the Strait of Hormuz, a critical shipping route between the Persian Gulf and global markets.
About one fifth of the world’s oil normally passes through the strait each day, meaning any disruption can quickly tighten global supply.
“If they shut that, that means we’ve only got 80% of the world’s oil available at any one time,” Collins said. “And the laws of supply and demand mean the prices will go up.”
Higher crude prices tend to flow quickly into petrol prices.
Collins explained that a commonly used rule of thumb is that every US$1 increase in the price of oil typically adds about one cent per litre to petrol prices.
With oil prices already jumping by more than US$20 since the conflict began, motorists could soon feel the effect.
“You won’t be able to get anything under $3,” Collins said, if oil got to US$150 a barrel as predicted by some in the Gulf region. “And it’ll be somewhere between $3.50 and perhaps $4 if those extreme prices are met.”
Some price increases are already showing at the pump. According to fuel tracking app Gaspy data reported by the NZ Herald, the average price of 91 octane petrol rose 14 cents over the weekend, with some Auckland stations nearing $3 a litre.
Meanwhile, 95 octane surging past $3 mark, with Auckland hitting $3.12.
Higher fuel prices could also ripple through the wider economy as transport and freight costs rise.
Retail NZ chief executive Carolyn Young told The Post that retailers were closely watching developments and warned some businesses may eventually have to pass those higher costs on to consumers.
Meanwhile, the Taxpayers’ Union has called for the Government to consider temporary relief for motorists.
Spokesman Jordan Williams said households should not have to carry the full burden of global instability.
“When petrol hits three dollars a litre, it’s working families and small businesses that feel it first,” Williams said.
For many households, however, cutting fuel use is difficult.
“For those people that live in the city they can take public transport or walk or cycle,” Collins said.
“But for many New Zealanders those options are just not available”.
If prices continue climbing, he said, households may instead be forced to reduce spending elsewhere.
“What we generally find is people don’t have the discretion to not buy petrol,” Collins said.
“They’ll look for savings somewhere else.”
Have rising petrol prices already changed how you drive or spend money? Tell us in the comments.