Petrol prices trimmed, room for further cuts

PETROL prices have been cut another two cents a litre as Brent crude oil tumbled to fresh lows under US$50 a barrel on world markets.

But the Automobile Association still thinks there is scope for fuel prices to come down another 2 cents to 3c a litre.

Petrol prices have now fallen 7 cents a litre in the past month, while diesel is down 10c a litre.

Z Energy trimmed 91 octane to about $2.05 a litre, with premium down to $2.14. Diesel was down to $1.24 a litre.

Pump prices even more, but could have fallen sliding world fuel prices have been partly offset by a weaker New Zealand dollar.

Lower fuel prices and falling mortgage interest rates will provide relief for some consumers facing a slowing economy and a more uncertain job market. A big fall in fuel prices lifts households’ buying power and lowers the costs of doing business.

In March, consumer confidence improved as petrol prices and mortgage rates fell and house prices rose. The same set of factors is repeating now, despite the slump in the dairy payout announced yesterday. Falling petrol prices will also keep a lid on already extremely low annual inflation.

Pump

prices

were

more

than $2.20 a litre in October last year and slumped close to $1.70 a litre in January this year before rebounding to $2.22 a litre in the middle of June. That means prices are down about 17c a litre from the recent peak just a couple of months ago.

Z Energy said the latest cut this week was driven by a fall in the price of refined petrol and diesel on the international market.

‘‘The price decrease may well have been larger if not for the New Zealand dollar which has continued to soften against the US dollar,’’ a spokeswoman said.

The New Zealand dollar was trading about US65.4c yesterday, down from more than US67c at the start of July.

Z said that pump prices depended on the price of refined petrol and diesel on the international market, rather than crude oil.

Refined product prices are also down more than US$10 a barrel to about US$75 a barrel.

‘‘But if lower crude oil barrel prices continue to flow through into refined prices, and the New Zealand dollar doesn’t continue to slide, then you could expect further cuts,’’ the Z spokeswoman said.

On international markets, Brent crude fell to fresh lows of just under US$49 a barrel, reflecting a stronger US dollar, the slowing Chinese economy and expectations that Iran would lift production when sanctions were dropped.