It has never been more expensive to fill up your tank in New Zealand.
The team behind fuel price tracking app Gaspy noted this week that the national average price for 91 octane petrol currently sits at $2.39.
This is up slightly on the record highs previously seen in the second half of 2018.
Many service stations around the country are now charging more than $2.50 per litre of fuel, adding pressure on Kiwis who are already facing rising costs elsewhere.
AA motoring affairs general manager Mike Noon told RNZ that small businesses and tourism and hospitality workers were also being affected by the price rises.
“I think it’s a really bad time,” Noon said.
”It seems to come out of Opec. There hasn’t been the supply that was expected to be coming out of Opec, and of course all these countries around the world, the economic rebound coming out of Covid has been really strong. So there’s a really high demand, not only just on petrol.”
Oil prices have been rising sharply in recent weeks, amid growing demand around the world.
WTI Crude oil continued its upward momentum today, trading higher by 0.2 per cent to US$80.6 per barrel, close to a three-year high.
The Financial Times reported yesterday that the US oil benchmark hit seven-year high, amid supply fears.
West Texas Intermediate, the US crude benchmark, hit a high of more than $82 a barrel yesterday, its highest level since 2014, before pulling back to $80.46, up 1.4 per cent for the day.
The Times reported that oil prices had climbed more than 16 per cent since the start of September.
This has largely been attributed to the global economic rebound, driven by a return to work for many citizens around the world.
Adding further pressure to oil prices is the shortage of natural gas, which has increased demand for alternative sources of energy.
All these factors combined have placed upward pressure on New Zealand fuel prices.
Noon also told RNZ that the current value of the New Zealand dollar wasn’t helping fuel prices.
”We buy crude oil and refined product in United States dollars,” he said.
”Our dollar against the US dollar — it’s been volatile and it’s nowhere near what it used to be a few years ago. Not only is the raw material increasing in price, but the money we are using to buy it has a little bit less value.”
Rising fuel prices will also heap pressure on businesses that already facing cash flow strain.
Fuel prices have a direct impact on the cost of transporting goods and this could lead to prices rising elsewhere.
The Consumer Price Index released in July this year showed an inflation rise of 3.3 per cent – the biggest increase in nearly a decade.
Those price rises were driven by higher prices for new housing and petrol.
With petrol prices now continuing to rise, the squeeze on Kiwi wallets looks set to only become tighter.
Record fuel prices in New Zealand come amid a warning from the International Monetary Fund (IMF) that central banks need to be “very, very vigilant” in dealing with inflationary risks.
New Zealand’s Reserve Bank has already taken its first steps against the risk of inflation, increasing the OCR for the first time in seven years.
Economists are predicting a string of OCR increases to follow over the next 12 months.
– Additional reporting from the Otago Daily Times
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