Oil companies under fire as dollar rises

By Phil Boeyen, ShareChat Business News Editor

Friday 31st August 2001

Farmers are pressuring oil companies to drop the price of fuel.

Neil Barton of Federated Farmers says the exchange rate has been increasing for over month now, and there have been no adjustments in fuel prices.

Although he says the exchange rate is only one of a number of factors that drives fuel prices in New Zealand, Mr Barton believes it is a major factor that should bring about a reasonably rapid price response.

"At the beginning of August, the kiwi dollar was worth just over 41 cents, and as of 29 August it was just over 44 cents. A difference of three cents in the exchange rate should have a significant impact on prices."

Mr Barton has been following the Singapore petrol and diesel prices, which are a good benchmark for pricing in New Zealand and the rest of the South Pacific.

"The Singapore price for petrol has been increasing slightly throughout the month of August, which has offset some of the benefit of the higher kiwi dollar. However, the Singapore price for diesel has been decreasing recently and yet we see no indication of this at the pumps. The retail price has remained virtually constant."

"Many farmers believe that the loss of Challenge as an independent fuel retailer has removed any significant competition from the market, and that the price lag we are seeing is caused by fuel companies attempting to improve their bottom line."

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