New Zealand diesel prices hit their highest level in 17 months in April on the back of rising crude oil prices, and tax increases could add another 10 cents a litre to the price of petrol by the end of the year, says the Automobile Association (AA).
Retail petrol and diesel prices increased 6 cents per litre during April and 91 octane ended the month at $1.82 per litre, and diesel at $1.22 per litre, the highest diesel price in 17 months.
"At US$85 a barrel, crude oil has now reached an 18-month high and this has led to an increase in the cost of imported fuels," said AA PetrolWatch spokesman Mark Stockdale.
Rising crude oil and refined prices were partly due to normal seasonal fluctuations and slowly improving global demand, especially from Asia. Some of the increase was offset by a slight improvement in the value of the New Zealand dollar.
International market analysts expect the increased competition in the refinery sector could put downward pressure on imported petrol and diesel prices in the coming months, Mr Stockdale said.
However, taxes on both petrol and diesel will increase this year. The Emissions Trading Scheme would add about 3 cents per litre to the cost of both fuels from July 1, with another three cents per litre being applied to petrol excise in October.
"Coupled with an expected increase in GST to 15 percent, petrol could end up costing another 10 cents per litre by the end of the year, with diesel rising about 6 cents per litre," Mr Stockdale said.
Meanwhile, AA PetrolWatch pointed out that the differential between 91 and 95 octane petrol was now 7-8 cents per litre, depending on brand.
"Many motorists will be unaware of this, as service stations now tend to only advertise the price of 91 octane and diesel. "Traditionally, the price gap was just 5 cents but it has been slowly rising due to increasing costs for premium fuel during last year."
98 octane petrol, where available, sells for 15c more than 91 octane.
