The Commerce Commission is advising motorists to take more time to shop around for the lowest prices on fuel in their local areas. Commissioner John Small said that this would help drive healthy competition with time and was a key factor in exerting downward pressure on pricing at the pump.
According to the commission, fuel makes up as much as 50% or about $2,000 of the annual energy costs for a household. It believes that even minor differences in the pump prices are different stations can amount to meaningful savings for consumers who are having to deal with the spiralling cost of living pressures.
The Quarterly Fuel Monitoring Report indicated that though discounting was a common feature in the country’s retail fuel market, this did not always represent the lowest possible price. Dr Small said that in some cases pump prices could differ at petrol stations that were across the road from each other. He is urging Kiwi motorists to shop around for the best deal before filling their tanks.
Making comparisons is not difficult given that new consumer information guidelines require petrol stations to display their pricing on regular and premium-grade petrol and diesel. This rule came into effect in February 2022 and allows motorists to quickly find out at a glance at pricing boards what the price is before making a decision.
Fuel prices did go up during the June quarter due to rising global crude oil prices and foreign exchange rate fluctuations. For regular 91, average importer margins were reportedly 27% lower than in 2018. Diesel margins fell by 27% over the same period.
Dr Small added that while reduced importer margins were a good sign that competition had increased, further analysis was needed in the coming periods to ascertain that the reductions were sustained.
This comes less than two weeks since the Commerce Commission was given the power to set fairer petrol and diesel prices. The Commission will be able to step in from mid-next year in regulating this if the pricing offered rises too high. For now, wholesale fuel suppliers are required to share their daily spot prices. This measure was taken to help in making the country’s fuel system more secure and affordable.
Energy and Resources Minister, Megan Woods, said that this legislation had been introduced in 2020 and since then fuel company profit margins had reduced. She said the government was better able to track the fuel margins of fuel companies and was now enabling the Commission to set prices if they become excessive. She added that the changes would ensure the country was more resilient than when Marsden Point was operating. The Marsden Point oil refinery was the country’s only oil refinery and was closed in April 2022.
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