Petrol prices rocket up but feather down: Commerce Commission

Petrol retailers are quick to raise prices in response to increased costs but slower to reduce prices when global oil prices fall or exchange rate changes reduce costs, according to analysis of fuel monitoring data by the Commerce Commission.

As a result, Commissioner Bryan Chapple said motorists were often forced to over-pay for petrol. 

“We can see clear evidence showing that fuel companies maintain temporarily higher margins after a decrease in their costs, lasting up to two weeks – at great expense to Kiwi motorists,” he said.

“Our findings suggest that petrol prices shoot up at the pump in response to increased costs, but there is a noticeable lag in retail prices being lowered in response to decreases in underlying costs.”

The Commerce Commission estimated that if fuel companies dropped prices as quickly as they increased them, motorists would benefit by about $15 million per year.  

Mr Chapple says these findings were timely given the upcoming removal of the Auckland Regional Fuel Tax on 30 June 2024.

“In a healthy and competitive fuel market, we expect to see changes in underlying costs fully passed through into retail prices promptly,” he said.

 

 


Published: 21/6/2024
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