Diesel slips below petrol as fuel prices ease - but pressure on oil set to return

Monday, 4 May 2026

The average price of diesel has fallen back to just under the average price of 91-octane petrol for the first time in more than a month.

However, there are concerns the market may be near another inflection point and that prices for both fuels may soon resume an upward trend.

Price comparison site Gaspy reported the price of both diesel and ‘91’ at just over $3.26 a litre shortly after noon on Monday, with petrol down about 10% and diesel down 16% on their mid-April highs.

The Commerce Commission reported on Thursday that petrol prices were about what it would expect given the increase in cost of imported refined fuels since the Middle East conflict began on February 28.

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But its figures suggested that, in the case of diesel, fuel companies charged more than could be easily explained by higher refined fuel costs throughout April.

The commission reported that — as of Wednesday — the retail price of diesel had risen by $1.42 from its pre-conflict price, while the imported cost had risen by only $1.02.

However, it is understood the watchdog does not currently have concerns over fuel companies’ behaviour.

Its assessment is that the higher diesel margins in April were more than offset by lower margins in March when fuel companies struggled to raise their prices fast enough to offset surging costs.

Relative to petrol, diesel prices were slow to rise and, as a result, have taken longer to come down off their April peak, it is understood to have concluded.

The further wearing away of any excess diesel margin aside, pressures on fuel prices appear to be coming back on.

The price of Brent crude oil for July delivery was hovering around US$108 a barrel on Monday morning, little changed on Friday’s close.

But some analysts have begun suggesting oil futures should be higher based on underlying market conditions and may only have been held back by speculators betting on a breakthrough in negotiations between the United States and Iran.

Singaporean oil analyst Vandana Hari was one of a number of analysts garnering widespread attention over the weekend for their view that oil prices had “nowhere to go but up” until there was a prospect of the Strait of Hormuz reopening.

The Australian Institute of Petroleum reported that the Singaporean benchmark price for diesel had risen to a two-week high of A$250 a barrel on Thursday, and that the benchmark price of 95-octane petrol — which is more popular than ‘91’’ in Australia — had edged up to a three-week high.