Fuel prices hit highest level since Iran war began

Fuel prices in New Zealand have climbed to their highest level since the outbreak of the Iran war, with the average price of 91 unleaded surpassing its previous peak, according to live data from fuel price comparison website Gaspy.

According to Stuff, Gaspy data showed the average price of 91 unleaded was $3.506 a litre on Monday afternoon, up 47.93 cents, or 15.84%, over the past 28 days.

Diesel had reached $3.22 a litre, an increase of 50.63 cents, or 18.66%, while 98 unleaded was averaging $3.848, up 48.17 cents, or 14.31%.

Gaspy director Mike Newton told RNZ that the 91 price had marginally exceeded the previous peak of $3.502 recorded during the height of the conflict in April.

The war in Iran, which began with US and Israeli attacks on February 28, has disrupted global oil supplies and pushed fuel costs higher.

According to a report by Stuff, Iran responded by effectively closing the Strait of Hormuz, a major global oil shipping route through which about a fifth of the world's oil flowed before the conflict. Its allies in Yemen have also intensified disruption to oil shipments through the Red Sea.

The pressure on global fuel markets has been compounded by Ukrainian strikes on Russian refineries and increased Chinese demand for fuel after a period of reduced consumption.

AA principal policy adviser Terry Collins previously told Stuff that constrained oil supplies and rising shipping costs were contributing to higher fuel prices in New Zealand, Stuff has reported.

“We’ve got high oil costs, high refining costs, and high shipping costs, and a fairly weak dollar,” he said, Stuff has quoted.

Collins said it was difficult to predict whether 91 prices would continue rising and potentially reach $4 a litre, citing ongoing global uncertainty.

“All I know is that the US has agreed not to agree with Iran’s demands to end the conflict, so there’s still some uncertainty there,” he said, as quoted by Stuff.

The sharp rise in pump prices has also prompted political action, with Labour announcing on Monday that its proposed price-gouging law would apply to fuel companies.

The party said fuel companies were slower to pass on savings when international prices fell than they were to pass on increases.

According to Stuff, Labour pointed to a recent Commerce Commission report which found around 70 to 80% of cost increases were passed on during the first week, compared with only about 30% of cost decreases.

With international oil prices, refining costs and shipping expenses remaining volatile, motorists are facing continued uncertainty over how high fuel prices could rise in the coming weeks.