1 Jan 2015

Motorists urged to fill up while prices low

12:16 pm on 1 January 2015

Consumers and businesses will look to capitalise on the country's lowest petrol prices in more than four years, commentators say.

Major fuel suppliers, Z, BP and Gull, have dropped the cost of 91 octane petrol by two cents a litre as international oil prices continue to fall, with 91 Octane $1.89 a litre at most petrol stations; Gull has it between $1.70 and $1.80.

Super is selling for $1.99 at most outlets and diesel at $1.22.

The drops are driven by oil shedding about half its value since June, due to the slow growth in China, a recession in Japan and a near-stall in the Euro zone. During the past few days, Brent Crude has dropped to the lowest its been in five-and-a-half years.

AA spokesperson Mark Stockdale said fuel prices had not been this cheap since 2010.

"That makes it a total of 32 cents a litre drop in prices since October," he said.

"They're falling probably lower than what any experts had expected but from a motorists perspective, what better time of the year to have falling fuel prices (than) during our summer holiday period when lots of people are out driving long distances and buying lots of fuel."

Mr Stockdale urged motorists to keep their eyes peeled for the best prices and, if they saw lower prices, to stop and fill up.

Business New Zealand spokesperson Phil O'Reilly said fuel played a massive part in businesses.

"One of the things we're seeing is pretty good business confidence and fuel will be contributing to that improved confidence, there's no doubt," he said.

"But it's not just the fuel cost that you see - it's not just the cost of putting fuel in the truck or in the car - it's also about the implied cost of fuel in all the goods and services that you buy, everybody delivering things, everybody working for you is, of course, putting the price of fuel into the price of their charge.

"So at the end of the day, fuel coming down is just one part of the low inflation and the lowering costs story."

Pyramid Trucking owner Paul Chappel operates 26 trucks in the central North Island and said the low petrol price had been great for his business but even better for his customers.

"We run a fuel adjustment factor on our rates, so when the price of fuel goes up the customer pays and when the price of fuel comes down, the customer gets a benefit.

"So it's great for our customers, because we pass it straight on."

Mr O'Reilly said other business could also pass on savings to consumers in the future.