23 Mar 2011

Petrol prices surge to near three-year high

9:42 pm on 23 March 2011

There are warnings the price of petrol could rise still higher in the wake of Japan's earthquake and tsunami.

Fuel prices are at their highest level in New Zealand in nearly three years after the four main oil companies increased their prices by 3 cents.

Shell, Caltex, BP and Mobil raised the price of 91 octane, the most commonly used petrol, to $2.189 a litre on Tuesday

While oil companies exempted Christchurch from the 8 March price increase, motorists there have not been spared the latest rise. Prices in Christchurch have gone up by 5 cents a litre, putting 91 octane at $2.159 a litre.

Diesel prices were also increased by 8 cents in Christchurch to $1.60 a litre and by 5 cents a litre to $1.70 in the rest of New Zealand.

The Fukushima Daiichi nuclear power plant was badly damaged after a 9.0-magnitude quake triggered a tsunami that devastated the country's north-east coast on 11 March.

Richard Hale of energy analysts Hale and Twomey says Japan is moving away from nuclear power towards oil, increasing demand for oil and thus raising its price.

The managing director of monitoring company Fueltrac, Chris Kable, agrees that in the short term prices are likely to keep rising, but once uncertainty over issues such as Libya are settled, they are likely to fall rapidly.

The petrol price rise on Tuesday to $2.189 per litre is equal to a record high in July 2008. However, 13 cents of the increase since then comes from the Government's rising take, via higher excise tax or ACC levies.