A strong New Zealand dollar and the European financial crisis have resulted in the petrol price dropping to below $2 a litre for the first time since August, and the AA says motorists could be in for even more savings later this week.
Gull was the first of the major oil companies to lower the price for a litre of 91 Octane to $1.99 yesterday, with competitors following suit.
The Automobile Association's petrol watch spokesman Mark Stockdale told Radio New Zealand that at this rate, it would mean big savings for motorists.
"We weren't sure we'd ever get prices that low again so it's really great. In fact prices have dropped 20c in the last month, which works out to be a saving of about $8 for each fill if you're buying about 40 litres of fuel. Over a year the average motorist would be saving about $200 in fuel at the current price, compared to what we were paying just a few months ago."
However, the low prices wouldn't last forever.
"The long-term trend is that fuel prices will rise and not fall but certainly we should take advantage of these prices while we've got them."
Mr Stockdale said the oil companies could actually have dropped prices about a week ago.
"They're a little bit slow and at the same time our exchange rate is going up but it's better late than never, they are passing on the price reductions even if it's just a few days behind."
