Fuel prices in New Zealand are dictated by 4 main factors:
- The global price of crude oil
- Taxes in New Zealand
- The New Zealand Dollar exchange rate
- Local market factors
Global Price of Crude Oil
Crude oil and refined product are both traded on the global commodity markets. These markets are influenced by
the market forces of supply and demand.
OPEC (Organisation of Petroleum Exporting Countries) controls much of the supply of crude oil. It is in the
interest of OPEC to extract as much value for the crude supplied as possible, while at the same time not drive
the price so high that alternative fuels are more attractive, or to cause a world recession which would have a
negative impact on the oil industry. By restricting or easing the supply of crude OPEC can exert a lot of influence
on the price of crude and refined product.
Refineries process crude oil into petrol and diesel which is traded on the global market as refined product.
When demand is strong and refineries are operating at full capacity the price of refined product will be driven
higher.
Other factors impacting on the price of crude and refined product are; political instability within the oil
producing nations, demand from developing nations like China and India, unforeseen decreases in refining capacity
e.g.; Hurricane Katrina. Lately the world commodity markets have been very strong; there has been a large amount
of speculation on the price of crude oil and refined product which has driven prices up.
Fuel Taxes on Motor Fuels in NZ
 Duties, Taxes and Direct Levies on Motor Fuels in NZ
Excise Duty Refunds
The New Zealand Dollar Exchange Rate
Crude oil and refined product are both traded in US Dollars. When the NZ Dollar is stronger against the US Dollar
then crude oil and refined product will decrease in price.
Local Market Factors
Waitomo Petroleum adds a margin to the cost of fuel purchased from Mobil. The margin is calculated in consideration
of:
- Cost of operating our distribution network; Depots, Petrol Service Stations, Diesel Stops, and Commercial
Clients with fuel storage and pumping equipment.
- Investment in our fleet of tanker trucks
- Administration and marketing costs
- Competition
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