9 Mar 2011

Fuel prices up again

6:12 am on 9 March 2011

Fuel prices have risen again, with oil companies blaming the unrest in the Middle East and the drop in the New Zealand dollar.

BP, Caltex, Mobil and Shell said on Tuesday that they have increased 91-octane petrol at their pumps by five cents to $2.16.

North Island-based Gull says it has increased its 91 octane by three cents to $2.10.

A Shell spokesperson says unrest in Libya and the drop in the New Zealand dollar after the Christchurch earthquake have forced up prices.

The increase does not apply to Christchurch where the price of 91-octane petrol is $2.03.

Warning of more rises

A visiting oil economist is warning that petrol prices could climb 40 cents a litre in coming months.

Energy and oil economist and commentator Phil Verleger, who was director of energy policy under United States president Jimmy Carter in the 1970s, is in New Zealand to talk to Greenstone Energy and its part-owner Infratil.

Dr Verleger says the sweet crude produced in strife-torn Libya is some of the best in the world, and isn't easily replaced because it contains very little sulphur.

He says the political situation in Libya poses a real threat to the rate of economic growth, and unless a solution is found, the disruption to production could push the price of Brent crude up to between $US140 and $US150 a barrel.

Assuming the New Zealand dollar doesn't weaken, Dr Verleger says that would add another NZ40c a litre to the price of petrol at the pumps.

Dr Verleger also says an oil price-induced recession could be averted if some of the 1.6 billion barrels of strategic stocks held around the world are released.