BP pricing tactics outrage Kāpiti locals: 'They're holding us to ransom'

12:45 pm on 1 May 2018

Locals on the Kāpiti Coast are fuming after revelations about BP's petrol pricing tactics.

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Photo: RNZ / Richard Tindiller

BP has been called to a meeting with the Energy Minister Megan Woods this week to explain a leaked internal email that revealed the tactics the company was using to manage fuel pricing and profits.

The email showed the company was losing sales in Ōtaki, where prices were 20 cents a litre higher than nearby towns, but rather than make Ōtaki fuel cheaper it planned to hike prices in the other towns hoping other companies would follow its lead.

For Kāpiti locals the differences are stark: at Paraparaumu's BP station petrol is just over $2.10 a litre but less than 50km further north in Levin, Manawatū, the price is $1.99.

BP's bosses will have to front up at Parliament on Thursday and explain their pricing tactics.

Ms Woods said while what BP was doing was not illegal, she wanted BP to explain how widespread its price hiking practice was.

BP appeared to to be charging the highest price, not the best price for New Zealanders, she said.

"On the face of it, it seems to me like it could be a pretty cynical move. We already know from the MBIE [Ministry of Business, Innovation and Employment report] that we are seeing a massive transfer of hundreds of millions of dollars from consumer's pockets to the coffers of the petrol companies.

"I want to make sure consumers are getting a fair deal."

Ms Woods said legislation was before Parliament that would give the Commerce Commission more power to monitor petrol companies.

One local, Lorraine, said that's where she went to save money.

"Well I'm absolutely shocked because they're holding us to ransom. When you go up to Levin, when you're going north, you're getting good value for your money," she said.

The BP petrol staion in Paraparaumu (left) is 18 cents dearer than the BP petrol station in Levin (right).

The BP petrol station in Paraparaumu (left) is 18 cents dearer than the BP petrol station in Levin (right). Photo: RNZ / Richard Tindiller

"So I quite often take a 22 litre petrol can with me and bring it back here and put it into one of the family members' cars saving ourselves up to $5 or $6 a container."

She said BP's efforts to drive up prices were wrong.

Another local, Sheryl, wanted it stopped.

"Well it doesn't surprise me that this is happening because I don't think we can trust fuel companies to act with integrity so I think it's time for the government to speed up this review or inquiry that they're doing and get some regulation into the market.

Paraparaumu-Raumati Community Board deputy chair Guy Burns said BP had been caught red-handed.

"That's the way big business works, it's no surprise at all to most locals around here.

But it is something that it's worth it to look at because there's huge prices in Wellington, Kāpiti, but you go up to Levin - where it must be much more expensive to get the fuel up there - it's actually cheaper.

"It doesn't make sense."

He did not expect anything would change, however.

"Everyone wants cheaper prices ... no, it won't happen, no. The big companies they've got plenty of clout and they'll continue to work behind the scenes and they'll just make sure they're continuing to make their $200m a year profit and life will go on.

Legislation is before Parliament giving the Commerce Commission the authority to compel petrol companies to hand over commercial information.

Prime Minister Jacinda Ardern said the BP revelations added urgency to get those changes into law.

BP says it is simply responding to local competition, where discounting has become unsustainable.

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