A petrol price war heating up in a North Island town is raising questions about why fuel cannot be cheap across the country.
Petrol prices plummeted in Ngatea, an hour south east of Auckland, when an unmanned new Gull station opened selling 91 octane at $1.89 a litre.
Ngatea, with a population of only 1151, is the cheapest place in New Zealand to buy petrol.
The existing Z Energy, the New Zealand-owned company which is rebranding the Shell petrol stations, in Ngatea quickly followed the latest cut.
At Z it is $1.94.9 a litre for 91 octane, but if a customer uses a supermarket discount voucher they will get close to game changer Gull at $1.90 a litre.
The price drop has raised questions about why the same prices
cannot be offered outside Ngatea.
A Naked bus driver, who was filling up at Gull in Ngatea, told TVNZ's Close Up programme that the rest of the country needs to get its "prices right".
"If this place can do it, so can other places," he said.
A commuter said even the Z in Ngatea is cheaper than it is in Tauranga or Auckland.
"We can't explain that, it's odd, obviously they are competing with Gull, but why can't they do that everywhere."
A Tauranga woman said she buys her petrol in Ngatea when travelling to Auckland.
And a man told Close Up that "in Paeroa, 20kms up the road, its $1.99 so that's the difference, all the Paeroa people come over here and fuel up."
The latest drop takes the price of petrol to the lowest level since last August.
However, Z Energy says the low prices are not sustainable and motorists should get in quick.