Tuesday 21st April 2015 |
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Rising global prices for crude oil and a 4 cents per litre increase in petrol prices this week saw Z Energy release updated research today from the New Zealand Institute of Economic Research showing petrol prices react to international price changes within a fortnight and fall as quickly as they rise.
In a report titled "Petrol prices (still) rise and fall at the same speed", NZIER says the main change it has noted since about 2010 is that international oil price changes are passed through mostly within the following one or two weeks, rather than taking three or four weeks to filter through to the motorist at the petrol pump.
"Both oil price reductions and oil price increases end up in retail prices more quickly than they used to," says the report, dated April 20 and released this morning by Z chief executive Mike Bennetts.
The publication coincides with criticism from the Automobile Association about the decision by Z and BP to raise petrol prices by 4 cents a litre this week. AA analyst Mark Stockdale was reported as saying he believed the companies had acted "a day or two" earlier than necessary.
NZIER said its analysis was "by no means conclusive, but faster pass-through is symptomatic of improvements in market behaviour from the perspective of consumers and regulators interested in workable competition."
In a statement accompanying the release, Bennetts said Z had "no input into, or a review of, this report whatsoever prior to its publication."
NZIER made similar findings in 2013.
Its analysis shows the rate of pass-through was "stable or declining" between 2009 and late 2011, but that retail petrol prices have become more volatile since then. Z rebranded the former Shell service station network in mid-2011 and in more recent times, oil prices have been volatile, spiking above US$110 a barrel last year before falling close to US$40 a barrel this year.
The price of Brent crude oil, a global benchmark, rose to its highest point this year on Monday, to US$64.02 a barrel, following a decision by the People's Bank of China to stimulate the Chinese economy by reducing capital-holding requirements at the nation's banks.
Inflation figures released in New Zealand yesterday showed that an 11 percent fall in petrol prices in the first three months of the year was the main cause of a 0.3 percent fall in the overall level of prices. However, that release also warned that petrol prices had risen towards the end of the month of March and that if prices were sustained at levels prevailing on April 17, petrol would have an upward impact on the CPI in the June quarter.
BusinessDesk.co.nz
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