Petrol not fast to rise and slow to fall

August 7, 2008

A government study found that, contrary to popular belief, petrol prices don’t rise quickly and fall slowly.

The key findings of the review were:

* The New Zealand petrol market is fundamentally competitive;

* Price rises are mainly due to increases in crude oil price overseas;

* Retail petrol prices are not fast to rise and slow to fall;

* A Fuelwatch scheme like that in Australia (where petrol prices are published and fixed for a certain time) would not work in New Zealand as the market is different; and

* There was a need for more transparency on importer margins and reporting them would be useful for consumers.

The report, which was commissioned by the Ministry of Economic Development, found we’ve got the fifth lowest petrol prices inclusive of taxes in the OECD.

I’m pleased we’re not going to waste money on a Fuelwatch scheme. But I’m not sure that there is much comfort in having the fifth lowest prices in the world when that price is so high and impacts on almost everything we do or buy.

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