Many Factors Influence Pump Price

NEW ZEALAND’S petrol companies make pricing decisions daily, factoring in costs, exchange rates and what competitors are doing.

Shell’s Jackie Maitland said the cost of crude oil, refined product and the exchange rate with the US dollar were the main three variables considered before a call was made on pump prices. Shipping costs also feature because New Zealand imports about 40 per cent of its fuel needs. BP spokeswoman Diana Stretch said a $1.35 change in the price of a barrel of refined petrol equated to a 1c change in the price of a litre of petrol.

Ms Maitland said no one but petrol companies had accurate information on refined prices, because of the price charged for the data.

As a result, the public only ever heard about part of the equation.

“Sometimes there’s a drop in the barrel (price of crude oil), but refined is going through the roof.”

Caltex spokeswoman Sharon Buckland said major companies tried to beat their rivals on price.

“The public’s perception is that prices rise together, but they don’t rise as much as they would if it were a monopolistic environment.

“We have an intensely competitive market. It is very price- sensitive so it will only allow the absolute minimum price increase.”

According to the Economic Development Ministry, petrol companies’ margins are about 8 per cent of the price at the pump.

Taxes and levies make up 35 per cent and the remainder is the cost of product.

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