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Oil pump - Source: Reuters -
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Petrol prices are expected to calm down after reaching an 18 month high.
The cost of fuel rose three to five cents on Wednesday afternoon, following a five cent hike last week.
The oil companies are partly blaming a weaker New Zealand dollar exchange rate but business analyst Roger Kerr says that doesn't quite stack up. He says the New Zealand US exchange rate reached a three week high on Thursday morning, while the cost of crude oil is now $82.70 a barrel.
Kerr says the last thing oil producers want is high oil prices slowing the world economy.
Gull is the only oil company holding off hiking fuel prices, with the rest increasing prices by up to 10 cents over the space of a week. Gull general manager Dave Bodger says over the last two days the price of refined product has actually dropped.
Bodger says they don't want to follow the knee-jerk reaction of other oil companies and extract money from motorists.
AA PetrolWatch spokesman Mark Stockdale said on Wednesday it is the highest point in about 18 months. "I think it's getting a little bit uncomfortable for motorists just at the moment," he says.
AA PetrolWatch reported last week that retail fuel prices had remained unchanged since January 19, when they fell three cents a litre across the board.
Stockdale says our exchange rate isn't too bad at the moment and that is causing concern. He says people can understand that when the exchange rate is low, around 55 US cents, that generally spells a rise in the price of petrol. But he says the dollar is currently at 70 US cents and yet we are paying over $1.80 a litre.
Crude oil and refined petrol prices rose between 4% and 6% during February, with refined diesel up 10% - reducing oil company importers' margins.
In July 2008 petrol rose at a record rate to reach 217.8
cents a litre but thanks to a steady supply of oil, some say there
is little chance it will reach those record highs.
