Petrol companies raised prices after lockdown lift announced

By Will Trafford

Petrol companies pumped up prices days before Auckland emerged from its covid-19 lockdown, generating margins above their ‘normal range’ according to analysis from the Automobile Association.

Regardless if you're one of the 1 million Aucklanders who emerged from lockdown stunned by the highest gas prices in Aotearoa’s history, or the almost 4 million other kiwis who watched it creep up over the past few months, pain at the pump is escaping nobody according to the AA.

Gas prices for unleaded 91 are tipping $2.80 a litre in some regions across the motu and on places like Aotea, Great Barrier Island that’s an unenviable milestone locals passed long ago, $3.50 a litre is the norm. Now data from the AA reveals the latest round of price hikes hit the bowser just days before the brakes were taken off travel across the motu, when the country transitioned to the Covid-19 Traffic Light system on December 3rd.

‘Are we being ripped off? Yeah a little bit’ That’s the take from AA Principal Policy Advisor Terry Collins on the latest round of hikes, saying prices became ‘noticeably high’ in November.

Collins says gas prices are made up of the crude oil itself, with transport, refining costs, taxes and the putea the retailer makes poured on top. Crude oil isn't especially high at roughly $75 a barrel right now, but analysts blame high prices at the pump on supply shortages due to the pandemic. That’s only half the story according to Collins who argues the latest hikes mean retailers are making far more profits, than they usually do.

Companies are ‘operating above their historic upper margin limit, and well above the normal range of margins’ he says.

The AA says the latest price hikes are of a concern for whānau who’d hoped to travel for the holidays. A survey of kiwis on current pricing reveals two-thirds said the pump prices were affecting them and the way they used their vehicle.

‘Half said they were driving less, while a quarter said they were having to cut back on other expenses like groceries.’ the association said.

The AA is advocating for an immediate price drop while citing a 2019 commerce commission review that revealed the market was ’ not as competitive as it could be, and that fuel companies were making higher profits than the Commission would expect.’

The AA says some of its recommendations to the commission will come into force around February this year, including retailers being forced to display the price of premium fuels on the roadside. Other regulatory changes it had hoped would decrease prices at the pump appeared to have little effect so far.

The AA says prices swing wildly, between ’20-30 cents per litre or more’ across the motu and the advice it gives whānau before traveling is to shop around by using smartphone apps like ‘Gaspy’, which uses your location to determine the cheapest retailer.

“Think about stopping to top up your tank with cheaper fuel during your trip instead of getting to your destination and filling up at a higher price.”

For Aucklanders or those travelling through the city, stopping for gas along the journey may avoid the rohe’s 10 cent p/litre regional fuel tax.

“Make sure your tyres are inflated to the correct pressure, drive smoothly and steady rather than doing heavy accelerating and braking, and not driving around with unnecessary stuff in your car that adds weight can make a 10% difference in how much fuel you burn.” the group added.

Collins said despite the overall high prices there had been some good news in recent weeks with prices pairing back by roughly 8 cents a litre, but he argues in an environmentally-focused world moving away from hydrocarbons, that was unlikely to be the trend.

"The days of cheap petrol are over" he said.