Motorists should not anticipate major petrol price cuts anytime soon, despite the global glut of crude oil and its price plunge to near 12-year lows.
Global crude oil prices have fallen for seven consecutive days now - down 17% in all - with the benchmark North Sea Brent crude slipping below $US30 ($NZ46) a barrel yesterday, a day after US oil prices breached that level.
Rising concerns about a global supply glut has dragged oil prices down to 12-year lows, prompting analysts to predict $US20-per-barrel prices this year.
In New Zealand, 25% of the cost of a litre is the crude oil component, 50% is the total cost of all Government taxes and 25% is the cost of refining oil to fuel, the latter including a net profit of about 6c per litre for the fuel companies.
In July 2008, New Zealand petrol was at a record $2.19 per litre, when crude oil hit $US147.27 a barrel.
AA petrol watch spokesman Mark Stockdale said when contacted it was not the cost of crude which contributed the largest cost component, but the cost of the refined product.
"Forget about [crude] oil prices; the biggest influence on pump prices is the refined cost,'' Mr Stockdale said.
Marsden Point refinery supplies 50% of the country's fuel, importing crude oil for around $US30 per barrel, and after processing, selling the refined product to fuel companies for just under $US60 per barrel.
New Zealand's domestic oil production is exported and the fuel companies themselves import the 50% balance of refined product.
While global crude prices were near 12-year lows, the cost of a refined barrel was only at a 12-month low, Mr Stockdale said.
"Even if refined commodity prices fell by 10%, the retail price would only fall by about 2.5%,'' he said.
He said a rough guide was for every $US1 decline in crude prices to see a 1c decline per litre.
Should crude continue its downward spiral from $US30 to $US20, as predicted by analysts, that would equate to a 10c decline per litre, he said.
Mr Stockdale said even in the unlikely case that crude oil prices were to drop to $US1 per barrel, taxes and production costs would still see fuel selling at between $1.30 and $1.35 per litre in New Zealand.
Mr Stockdale noted the refined cost of diesel had just declined to around $US50 a barrel last week, which prompted the 6c diesel price shift last Friday.
While global oil prices had fallen from more than $US100 18 months ago to around $US30 yesterday, by mid-December New Zealand pump prices booked nine consecutive falls since September, with petrol down 19c and diesel 20c, at the time.
"The AA is still expecting pump prices to fall,'' Mr Stockdale said yesterday.
Reuters reported US crude oil futures plunged as much as 4%, or by $US1.25 a barrel, following release of US government data showing a large surge in gasoline and diesel stockpiles.
Prices fell as low as $US30.10 a barrel. US crude prices were last up 1.2% at $30.75 a barrel, while Brent was down 0.5% at $US30.73 a barrel.
Reuters said US crude sank as low as $US29.93 at one stage on Tuesday before recovering.
Early on Wednesday, the contract was US30c firmer at $US30.74 a barrel.
Benchmark Brent was quoted US81c lower at $US30.86 a barrel.
