New Zealand: Latest Fuel Price Drop Affects Fuel Stocks at Service Stations

Major companies, starting with Shell, announced successive price drops as 91 unleaded fell by up to 9 cents a litre and Gisborne petrol stations were quick to respond. All but the Caltex outlets moved their 91 price to match the new national level. Shell, BP and Mobil are now all at $1.559 a litre - the two cents difference from the national average accounted for by the extra cost of transporting the fuel here.

Caltex stations  dropped their price to $1.609, several days after the others. Petrol has dropped by 19c a litre since November 3 and is at its cheapest since October 2007.  It amounts to a 35 percent drop from the high of $2.19.

Caltex Makaraka and Gladstone Road franchise operator Ray Foot said the reason for the late drop in price was because they still had three-and-a-half days of fuel stock left in their tanks at the higher price.

"Unfortunately, Chevron organises our fuel and it comes from out of town, and we have no ability to control the deliveries of fuel," he said.  "Therefore, from a business case point of view, we cannot afford to drop the price until we've run the stock out. The operating margin on fuel is minimal cents per litre and we don't want to sell fuel at a loss."

Spokesperson for Chevron New Zealand, which markets the Caltex brands, Sharon Buckland said independently-owned service stations set their own price.  "Under the provision of the Commerce Act we can't dictate to a retailer what their price should be. We can recommend a price but ultimately it is their own business," she said.

Petrol station staff said they were often put in a difficult situation trying to explain to customers why their price had not come down, but it was up to the actual owners of each outlet to determine the pricing policy.

Earlier in the year, petrol stations in Gisborne and elsewhere around the country were suffering losses as a result of "drive-offs" - where customers would fill up and drive away without paying. Most outlets have boosted security with cameras and a prepay system, as well as getting staff out on the forecourt.

PetrolWorld 161108