Pump prices should be falling

But the AA says retail prices should now be falling again, after a slight improvement in the New Zealand exchange rate.

“In the AA’s view, when fuel companies raised prices by 6 cents per litre in the first half of September, they increased their margin above the norm. The fuel companies should now be dropping retail prices by 2-3 cents per litre,” says AA PetrolWatch spokesperson Mark Stockdale.

While commodity prices had increased by 10 per cent, which sounded like a lot, the AA says motorists should not expect retail prices to rise by the same amount.

“Because commodity prices only make up about a third of the retail price of petrol, pump prices should only change by about a third of that amount,” Mr Stockdale said.

According to AA PetrolWatch, the price of 91 octane petrol at most outlets ended the month on $2.04 per litre, with diesel prices in many of the main centres rising to $1.26 per litre. However, in some locations prices were 14 cents per litre or more below that due to local competition.