AA warns petrol prices could hit $3 a litre this year

It’s no secret that petrol prices have been trending upwards. Last October NZ Autocar reported that prices had hit a new national high, with 91-octane clocking a national average of $2.39 per litre according to fuel data group Gaspy. 

In the months since and into the new year, prices have continued to surge. The Gaspy app now reports average prices hovering around $2.50–$2.60 nationwide, having reportedly peaked at $2.70 earlier in the month. 

Now, the Automobile Association (AA) has warned that prices could continue to escalate to beyond $3.00 per litre for 91 — unchartered territory for petrol prices in New Zealand. 

Speaking to Newshub, AA principal policy advisor Terry Collins says that prices began to increase as a result of coming out of Covid-19 lockdown. 

Under lockdown demand for fuel dropped, subsequently dropping production of fuel. The world’s emergence from lockdowns has seen economic activity grow at a greater rate than the production of fuel, contributing to the price rise. 

He adds that prices have been “further exacerbated” by coal and gas shortages prompted by the Northern Hemisphere’s increase in demand for electricity during winter. 

Collins says that petrol prices could plateau and then fall away as the year progresses, although he says prices are “very hard to predict as there is so much uncertainty.”

“Longer-term oil prices will continue to increase as the decade passes. By then we will be exhausting the source of cheap oil. In 2022 they [prices] will be at the mercy of COVID variants and the impact they have on economies and lockdowns,” he says.

The cheapest price for 91-octane fuel in Auckland that we could find on Gaspy at the time of writing was $2.48 at Gull in Avondale. In Wellington the cheapest was $2.37 at Caltex Naenae. And in Christchurch it was $2.35 at Gull Woolston.