14 Jun 2014

Fuel prices could go higher - retailer

3:18 pm on 14 June 2014

Motorists could face higher petrol prices next week as the Iraq crisis pushes oil prices to new nine-month highs.

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Brent crude oil has surged more than five percent this week, the biggest weekly rise in nearly a year, over fears that the Iraq conflict could worsen and disrupt oil exports.

Petrol companies in New Zealand are watching closely to see if the crisis will escalate in Iraq, the second-largest producer in the Organisation of Petroleum Exporting Countries (OPEC).

Gull's general manager Dave Bodger said the high oil prices have been partly offset by the high New Zealand dollar. But he said retailers could not absorb the sharp rise in crude oil and a price rise was inevitable.

"As crude moves up there's more pressure to increase prices at the pump for all oil companies. Possibly some companies would look to move next week. Some are a lot more enthusiastic about putting their prices up than Gull. We won't be moving immediately" he said.

Spokesperson for Z Energy Jonathan Hill said petrol prices were under pressure and more likely to go up than down. He agreed the high dollar was not enough to offset the sharp oil price rise.

But the Automobile Association's petrol watch spokesperson Mark Stockdale said petrol and diesel were overpriced at the pump, giving fuel companies a cushion.

"Retail prices in New Zealand are probably little bit higher than they should be and fuel companies really should have been dropping prices anyway -especially on diesel."

Petrol companies will reassess the situation early next week.

US President Barack Obama said if insurgents took control of refineries, disrupting supplies, other oil producers in the Middle East will need to make up for the shortfall.