New Zealand drivers are paying about 4c a litre more for their fuel than justified by import costs, says the Automobile Association.
Calling yesterday for a price cut, AA spokesman Mark Stockdale challenged the suppliers to explain why they needed what he claimed were larger-than-normal margins.
That follows six weeks in which 91-octane petrol has been knocking $2.20 a litre - only 2c below a record set in May last year - and diesel has been selling at just under $1.57.
Mr Stockdale said imported costs of both fuels had fallen by 3c to 4c a litre since the last recent price rise, on March 14, yet pump prices remained constant throughout last month.
"We don't expect changes overnight. It would probably be frustrating if prices changed at the pump every day in response to every half-cent movement in the commodity price," Mr Stockdale said. "But based on past behaviour, they should have dropped the price by now." But the AA's challenge was rejected by Z Energy spokesman Jonathan Hill, who indicated it was being simplistic in citing only the import margin.
"What they are not factoring is where refining margins are at." By that, he meant the cost of refining fuel at Marsden Pt and then shipping it around the coast to the rest of the country.
Mr Hill said his company had tdecided to refine 70% of its product at Marsden Pt and then ship it at a cost of $4 to $5 a barrel.
Although the overseas refining margin had sunk to about $3, Z believed it to be in New Zealand's best interest to retain local production capacity.
That was why Z and BP had supported a planned $365 million upgrade of the Marsden Pt refinery. However, Mr Hill denied the oil companies were trying to pay for the expansion by keeping pump prices up.
BP spokesman Jonty Miller pointed to a long time lag for crude oil passing through the refinery, meaning higher input costs. He said BP reviewed its prices daily, and would do so again today.
Gull said it would keep trying to reduce prices but it faced cost rises, such as bank charges.
Pump prices
• 219.9c a litre - Main-centre petrol price at most pumps (91-octane).
• 157.9c - Diesel.
• 3c to 4c - Reduction in imported cost of refined fuel since previous pump price rise (according to the AA).
• March 14 - Last previous pump price change (a rise).
