Brace for NZ petrol prices to hit $3 milestone, and diesel at $2.50 amid Iran conflict
Monday, 9 March 2026
Kiwis may be paying about $3 a litre for 91 octane petrol and $2.50 a litre for diesel in the coming days, based on current prices for importing bulk fuel.
The price of petrol at the pump has already climbed over the past few days in the wake of the conflict in Iran, but data suggests significant increases remain in the pipeline even if international prices stabilise at current levels.
AA policy adviser Terry Collins said last week that a good rule of thumb was that a US$1 increase in the price of a barrel of oil tended to result in about a one New Zealand cent increase in the price of fuels.
The price of oil has risen about US$20, to US$93, a barrel since the start of the conflict.
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But New Zealand imports only refined fuels, and the margin for refining petroleum products has blown out in recent days due to shortages and rising shipping and insurance costs, greatly exacerbating the impact of the oil price rise itself.
The Australian Institute of Petroleum reported that the market price of diesel on a key Singaporean market commonly used for benchmarking had shot up by A$90 a barrel from its pre-conflict price by Thursday, to reach about A$220 a barrel.
The benchmark price of 95 octane fuel had risen by nearly A$45 a barrel on the Singaporean market to approach A$160 a barrel, it also reported.
The price of oil has risen by about US$8 a barrel since it released those figures on Thursday.
Those movements imply about a 70c per litre increase on the pre-conflict price for diesel and about a 40c increase for 91 octane petrol at the pump in New Zealand — assuming international fuel prices remain stable and the price of ‘91’ moves in line with ‘95’.
Like New Zealand, Australia imports the bulk of its fuel from Asia and the two fuel markets tend to move in tandem.
The Australian Institute of Petroleum said the Singaporean benchmarks it quoted were relevant to the price of petrol and diesel in Australia.
“Australia's local oil refineries constantly compete with imported petroleum products from large highly efficient refineries in Asia, regardless of the cost of importing and refining crude oil.
“Consequently, the price of petrol at Australian refineries is based on international petrol prices,” it said.
It is understood petrol companies attempt to set retail prices based on the expected cost of replacing their current stocks.
That means the full impact of the current international cost-jump could be reflected at the pump within days.
Fuel markets reopen on Monday, meaning any further changes from then could feed into their decisions.
The direct and indirect impacts of the likely increases in the price of petrol, diesel and jet fuel on inflation could be significant.
Retail NZ chief executive Carolyn Young said its members might need to raise their prices if the unrest in the Middle East continued for a sustained period.
“Like many sectors, retailers are watching the events unfolding in Iran with concern,” she said. “The human impact of this violence is distressing and is also starting to have wider ramifications around transport and sources of fuel.”
“As we have seen before, when key shipping corridors are closed and oil supply chains are disrupted due to escalating tensions in the Middle East, New Zealand is not immune to the effects.”
Retailers had experienced an incredibly tough trading environment over several years and many could not afford to absorb additional costs, she said.
“Higher prices are not what any of us want to see, but … it is inevitable that if this conflict continues for some time, some of those additional costs will have to flow through to the consumer.”