18 Jan 2011

Petrol at almost $2 per litre

8:12 pm on 18 January 2011

The price of petrol is poised to break through the $2 per litre for the first time in more than two years.

Major retailers in New Zealand are now selling 91 octane petrol for just under $2 a litre - the highest price since 2008.

Caltex, Mobil, BP and Shell have all lifted the cost of 91 octane to $1.99.9 cents per litre in the main centres.

BP says the price of imported oil has gone up four cents a litre since 5 January. It says the company is passing half that cost to drivers and is absorbing the other 2 cents.

Diesel is about $1.36 per litre on Tuesday.

The Automobile Association says the current prices are fair, given the international price of oil, which has risen about $US10 a barrel in the past month.

The price of petrol rose 26 cents a litre last year, with most of the increase coming in the final quarter of the year.

AA spokesperson Mark Stockdale says the international cost of oil is rising faster than local prices suggest, as a strong New Zealand dollar is helping dampen the effects at the pump.

There was a 7 cent per litre increase on 1 October because of a rise in GST and excise tax.

Oil industry analysts expect the price of petrol to increase further as demand for oil picks up.

Australian company FuelTrac says the price of a barrel of oil is expected to rise by about $US17 this year, meaning a price increase of about 16 cents a litre at the pump.

The Automobile Association says prices will continue to rise because countries coming out of recession will increase their demand for fuel.