Source: Radio New Zealand
Diesel prices on 8th of April. RNZ / Mark Papalii
The fuel industry says people should start seeing some relief at the pump over the next week, despite motorists using diesel fearing prices could reach more than $4 a litre.
Following news of the US and Iran ceasefire, oil prices have fallen, which Waitomo Group chief executive Simon Parham, said was positive news for prices of fuel.
Parham told Morning Report, there would be some relief at the pump in the next couple of weeks and that relief would start to be seen on some gasoline products over the weekend.
Diesel would be a different story however, Parham said, and he expected it would take some time for prices to unwind – but he believed it would not get to $4 a litre.
“I think we’ll skim just under that.”
RNZ went out to speak to drivers at petrol stations on Wednesday, about diesel becoming the most expensive fuel at the pump as it overtakes 98.
According to fuel finding app Gaspy, 260 stations in the motu were charging diesel at $3.99 a litre, with some truck stops in the Bay of Plenty and Waikato hitting $4.20 a litre.
Motorists said that commuters and individuals could switch to petrol cars, public transport or working from home.
But commercial trucking fleets do not have that flexibility.
One contractor told RNZ business owners had no choice but to absorb higher diesel costs in contracts agreed months ago before the fuel crisis.
Another business owner said companies would have to decide whether to pass on the higher cost of diesel to their customers in any new contracts.
A civil construction company owner said: “We’re definitely feeling the pinch. We’re trying to wear the cost as much as possible. But we are looking at price increases”
They said that could cause ripple effects across all industries from construction to agriculture.
One builder told RNZ: “All our suppliers are charging extra on deliveries now.”
Parham said purchases of fuel had softened as prices rose, after a couple of weeks of panic buying.
He said demand was down about 10 percent.
“There’s definitely been a change in behaviours. We’re more keen than anybody to get these prices back down.”
Gaspy spokesperson Mike Newton said dependence on overseas refineries and the lack of alternatives to diesel would likely keep prices high for a while.
Fuel prices in general rose following the outbreak of war in the Middle East and the closure of the Strait of Hormuz, a major oil shipping route.
US President Donald Trump announced a two-week ceasefire on Wednesday which led to crude oil prices dropping.
However, Newton said diesel prices were unlikely to drop because New Zealand had no refining capacity and would have to wait for supplies from overseas.
Newton said diesel prices had risen sharply and it was not clear why.
“It’s been creeping up five cents a day sort of thing, but we’ve seen jumps of 30, 40, 50 cents. At some stations just out of nowhere, and it’s not clear to us exactly what is causing such a big jump so suddenly.”
He said the fuel crisis was worse than the price spike that followed Russia’s invasion of Ukraine, which drove up diesel prices by about 50 percent.
“Currently, we have already doubled the price of diesel, so it’s over 100 percent increase,” Newton said.
“So although we’re seeing similar patterns, the numbers are just so much bigger than what we saw during the Ukraine conflict.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
