Relief as petrol price dips

Published: 7:29PM Thursday July 17, 2008 Source: ONE News

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The cost of petrol has pulled back from its record-high with all major oil companies dropping their prices to the relief of motorists.

Ninety-one octane is now sitting at $2.15 on the back of a major fall in the price of a barrel of crude oil.

"We think that the conditions are becoming more favourable for a price decrease at the moment and we'd really like to see one, motorists would really like to see one," says Mike Noon of the Automobile Association.

And see one they did. What the AA wanted was a three cents drop and what it has got is a four cents slashing off the price of 91.

"Over the last couple of days there's been a downward trend in the oil price and in the refined price so we're able to pass those savings onto the motorists," says Graham Stirk of Gull.

That downward trend has been massive. There are three primary oil benchmarks across the world -the West Texas Intermediate, the London Brent, and Dubai which New Zealand's price is based on.

All have fallen in the last three days, with the Texas leading the way at record speeds, now at $135 a barrel.

"The main reasons for why crude has dropped so sharply over the last few days has been worries about global growth, worries about demand for oil," says Robin Clements, UBS senior economist.

"There was a sharp pick up in inventories in the US and also the Federal Reserve governor making comments that the US economy might be in a bit more strife."

But the results of that are being welcomed by motorists at the pumps.

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