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Price of Diesel Goes Down Again

Posted on: Wednesday, 30 November 2005, 15:00 CST

By BATHGATE, Adrian

Transport operators welcome 3c fall from recent record, but would like it lower yet.

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THE price of diesel has dropped at the pump by three cents a litre, following the trend of petrol in the past month.

BP led the field yesterday, pushing the price of diesel down to 91.9 cents a litre. The other oil companies followed suit. A BP spokesman attributed the decrease to the lower cost of refined diesel internationally.

Diesel prices have fallen by 10 cents a litre in the past month, from record levels of over $1 a litre. Petrol prices were unchanged yesterday.

A Caltex spokesman said fears had eased over the amount of heating oil available for the North American winter. "However, the situation there can change very quickly," he said.

Automobile Association spokesperson Jane Gayle welcomed the decrease, saying diesel prices have been slower to drop than petrol prices, after the devastation caused by hurricanes in the United States.

Road Transport Forum chief executive Tony Friedlander said the price drop would be welcomed by the transport industry, but prices had to go down even more for transport operators to be comfortable.

"It's great that prices have dropped, but people need to remember they're dropping from record highs."

Diesel, which is mostly used by commercial transport operators, has become increasingly popular with Kiwi drivers.

Land Transport figures show that in 1999 there were just over 2 million petrol and 134,000 diesel cars. At the end of 2004, there were 2.39 million petrol cars and 210,000 diesel cars. Advances in diesel technology meant that diesel cars were now quieter and were usually cheaper to run than petrol cars.

High petrol prices usually affected consumers directly, but high diesel prices had a flow-on effect, pushing up prices for many goods.

Mr Friedlander said recent diesel price drops might not flow through to shop shelves, as many transport operators had absorbed the increases rather than passing them on.

"We're still at high levels historically, and we're still at high levels compared to 12 to 18 months ago."

The increase in fuel prices in the past two years had also hit industries such as fishing and forestry, who used large amounts of diesel, Seafood Industry Council chief executive Owen Symmans said. Diesel was about 30 per cent of the industry's costs and any drop was welcome.

"It's a significant cost and we're hoping it drops further."

Source: Dominion Post

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