June 16, 2008

Shell Breaks Ranks on Petrol


SHELL has broken ranks and raised petrol by 2c less than its three main competitors who raised prices 12c in two days this week, the sharpest increase so far.

The slight difference between service stations will be cold comfort to motorists who have seen the price of petrol increase by 50c a litre in nine months.

Shell's strategy forced Caltex to drop its pump price by 2c, but BP and Mobil did not relent.

For those filling up today, the cheapest petrol prices are likely to be $2.11 a litre for 91 octane, $2.16 for 95 and $1.84 for diesel at Shell and Caltex stations. BP and Mobil prices are 2c higher.

Caltex spokeswoman Sharon Buckland said the move back to match Shell was to remain on a par with competitors in a "highly competitive market".

Petrol and diesel prices at BP, Caltex and Mobil rose 6c on Tuesday and again on Thursday, while Shell reconsidered its position after the first rise then opted for a smaller increase yesterday.

Shell spokeswoman Jackie Maitland said the price, up 10c a litre since Tuesday, was as low as Shell could justify, after holding off on the second increase for a day in the hope that conditions would improve. "Unfortunately the New Zealand dollar remains lower and we have seen no respite from the increasing barrel price (of oil)."

Ms Buckland said the initial 6c rise on Tuesday was "restrained" in the hope the international refined prices would abate, but that had not happened. "In fact, market conditions have worsened."

But she said Shell undercutting the market forced Caltex's hand. "We have to remain competitive in New Zealand, that is important to us."

US crude oil prices were down to US$136.68 per barrel yesterday, a drop of 6c, minute compared with the rise of nearly $11 a week ago.

Other influences were going the wrong way too, with the oil currency, the US dollar, strengthening and increased concerns about oil worker strikes in Nigeria having further impact on supply.

Ms Buckland said the market was particularly volatile.

"The market indicators that would tell us things might ease off are not there."


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