Fuel prices are rising sharply across New Zealand, with petrol and diesel increasing by about 50 cents a litre over the past month, according to live fuel price data.
One of the highest prices recorded by Stuff on Thursday was at BP 2go Waiheke, where 91 petrol was selling for 414.9 cents a litre, premium petrol for 429.9 cents and diesel for 389.9 cents.
AA principal policy adviser Terry Collins said he was not aware of other stations charging more than $4 a litre for petrol, but noted that Waiheke Island has traditionally been among the most expensive places in New Zealand to buy fuel, as reported by Stuff.
“Waiheke Island always is expensive because it’s just the nature of the freight cost to get the fuel across there,” Collins said.
“It’s an anomaly. It’s an outlier. For the locals there, it’s not a great thing that they’ve got to pay that money, but they’ve always been one of the most expensive fuels,” as quoted by Stuff.
He said the Waiheke prices were not representative of the mainland, where fuel costs differed considerably depending on location and competition.
Gaspy data showed that some of the cheapest 91 petrol prices on Thursday morning remained below $3.10 a litre. These included Tasman Epsom in Auckland at 299.4 cents, U-GO Epsom at 303.6 cents, Mobil Express Parnell at 305.9 cents, Gull Tokoroa at 308.6 cents and Mobil Express Swanson at 308.9 cents, Stuff has reported.
Despite those variations, the overall trend has been strongly upward. Gaspy's live figures showed 91 petrol averaging $3.37 a litre, while diesel averaged $3.11. The average price for 95 petrol was $3.55, and 98 was $3.71.
The latest averages are approaching levels last seen during the most intense phase of fighting in the Middle East in March, when 91 petrol prices climbed to around $3.50 a litre, as reported by Stuff.
Collins said international instability and disruptions in the Middle East were key factors behind the latest increase, with restrictions on oil supplies and rising transport costs adding pressure.
“Geopolitical events currently occurring in the Middle East have had a series of actions that have restricted oil supply,” he said.
“As a consequence, the price of petrol has gone up, and that’s what we're seeing currently coming through the retail price here,” as quoted by Stuff.
He said uncertainty around major shipping routes, increased tanker costs and pressure on refineries were also contributing to higher prices in New Zealand.
According to Collins, some tanker insurance and shipping rates had increased by hundreds of percent, adding about US$32 a barrel to certain shipping costs. The market has also shifted from larger supertankers to smaller Suezmax vessels, which can be redirected through the Suez Canal.
“The two major factors are the high shipping costs and the high cracking spreads that the refineries are doing, and they’re just feeding into these high prices that we’re seeing at the market,” Collins said, as quoted by Stuff.
Cracking spreads refer to refinery margins, the difference between the cost of crude oil and the prices refineries receive for petrol, diesel and other products.
According to Stuff, Collins said attacks on Russian diesel facilities connected to the war in Ukraine were also putting additional pressure on global diesel supplies.
Global oil prices have remained volatile after a sharp increase.
“What we’ve seen is the price jump to about US$108. It’s come down to about US$100,” he said.
Motorists may have to wait before prices ease, with Collins warning that elevated prices could continue for weeks or longer if tensions in the Middle East worsen.
“It’s very hard to pick what’s happened because of the constant threats of some form of military action and whether they go ahead or not,” he said, as quoted by Stuff.
“It’s going to be prices are going to be sustained and high up until at least November.”
He said further military action could push prices even higher.
“If there was to be some more sustained military action, yes, the prices would go back up again,” as quoted by Stuff.
China's use of strategic oil reserves had helped limit some of the pressure, Collins said.
“If they continued to buy oil at the rates that they had been purchasing it, the prices would be much higher,” he said, Stuff has quoted.
Similar concerns are being reported across the Tasman. The Sydney Morning Herald reported that global supply buffers that had initially softened the impact of the Iran conflict were being depleted, increasing the possibility of further price rises if fuel inventories tightened.
Australia is particularly exposed to international fuel prices because it imports more than 80% of its petrol, diesel and jet fuel.
New Zealand is also heavily dependent on imported refined fuel. Since Marsden Point stopped refining in 2022, MBIE says all of New Zealand's domestic petroleum requirements have been supplied by imported refined products, primarily from Asian markets including South Korea, Singapore and Malaysia, as reported by Stuff.
Z said it was monitoring developments in the Middle East and their impact on international fuel markets.
“Z’s fuel supply into New Zealand currently remains secure, with fuel shipments continuing to arrive as planned,” the spokesperson said.
“The current pressure is on the cost of importing fuel rather than the availability of fuel itself,” as reported by Stuff.
The company said higher global refined fuel prices, increased freight costs and tighter regional markets were driving up the cost of importing both petrol and diesel.
Collins said New Zealand remained exposed to international price movements but was not facing a fuel supply shortage.
“We’re a wealthy country; we can afford to pay for it, so we will get it,” he said, Stuff has quoted.
“Plus, we have good relationships and signed a bilateral agreement with Singapore around the supply of petroleum. Our markets in South Korea continue to supply us as we’ve been long-term clients.
“At this stage I’m not worried at all about supply,” as quoted by Stuff.