BP hikes fuel prices by 6c a litre

BP stations across New Zealand will raise fuel prices by 6 cents per litre from today, following drone strikes on Saudi Arabia oil production facilities at the weekend.

Leigh Taylor, a spokesperson for BP, said there has been a sharp increase in the barrel price since the drone strikes.

"This has happened alongside a weakening of the New Zealand dollar.

"The barrel price and exchange rate are two of the more significant contributors to the price of our fuel in New Zealand, and as a result there has been a 6cpl increase in prices on all products at BP Connect sites across the country today.

"We are acutely aware of the impact of rising fuel prices on consumers and will continue to review BP Connect prices every day to ensure our pricing is as competitive as possible."

Taylor said they did not expect any impact on retail fuel availability at this stage.

BP's move comes after an attack on two Saudi Arabian oil fields led to large spike in the price of oil - and warning petrol in New Zealand could surge to up to $3 a litre.

Earlier today, rival fuel retailer Gull committed to not increase prices at its outlets until the end of the week.

Gull chief executive Dave Bodger said local fuel prices usually followed prices in the international market.

"The long-held rule of thumb of a $US1 increase in the price of a barrel of crude oil equates to a cost increase of 1 New Zealand cent per litre still holds," he said.

International refined fuel prices in Singapore rose by about $US6.50 per barrel for petrol and $US5.50 per barrel for diesel overnight.

Gull estimated that with the current exchange rate this would lead to a 6.5 cents lift in the price per litre of petrol and a 5.5 cents increase for diesel.

"We will monitor the situation daily," Bodger said. "We appreciate that any price increase is a major blow for Kiwi motorists, and we will minimise and delay this as much as possible."

New Zealand's other major petrol retailers have also not lifted prices at this stage.

Yesterday, Z Energy chief executive Mike Bennetts said he was monitoring the situation and that the impact of the attacks would likely only be felt in the short term.

"Oil in storage is quite high at the moment, so if this was to go on for a week or so it could be easily managed," he told Mike Hosking Breakfast on Newstalk ZB.

"If it's a short-term disruption, it's probably worth up to $5 a barrel, or about 5 cents a litre at the pump. If it's a more long-term disruption, we could be looking at something around $10 a barrel, or 10 cents a litre."