21 Jun 2012

Petrol prices fall further

2:29 pm on 21 June 2012

Petrol prices, already below $2 a litre, have fallen further as an oil company dropped the cost by another four cents a litre.

Gull cut the price of 91 octane petrol to $1.959 a litre on Thursday.

BP said it was reviewing prices at least once a day because the market is changing so rapidly at the moment.

Price drops this week have pushed the cost of petrol below $2 a litre for the first time in 10 months.

Oil companies have attributed the latest falls to a combination of a strong New Zealand dollar and political turmoil in Europe.

The Automobile Association says the low prices could be around for a while yet and is predicting further cuts in the next week.

AA petrol watch spokesman Mark Stockdale says the drop below $2 could have come sooner.

"We seem to be lagging the reductions the reductions in the commodity price by about a week.

"But it's better late than never - they are passing on the price reductions even if it's a few days behind."

Gull New Zealand general manager Dave Bodger says the political situation in Europe and the Middle East is still fluid so it's anyone's guess how long the low prices will last.

BP external affairs manager Jonty Mills told Morning Report that prices could fall even further if the same factors remain in place.

However Mr Mills said petrol is a volatile market and anything could happen.

Energy consultant Richard Hale said the factors that influenced the price drop do not seem to be going away so prices could well keep going down.

He said there is continued over-production of crude oil and the euro zone crisis seems to be getting worse.