Petrol prices to rise say experts
By LOIS CAIRNS - Sunday Star Times
Last updated 10:39 10/01/2010

Experts say petrol prices could rise sharply in coming weeks, but they are unlikely to return to the eye-watering highs seen a couple of years ago - at least in the near future.

Oil companies BP and Shell hiked their prices for petrol by 4c and diesel by 2c last Tuesday, bringing the cost of 91 octane to 169.9c and diesel to 109.9c a litre. Oil industry insiders say further short-term price increases are likely because crude oil and refinery production prices are edging up around the world. Most of New Zealand's oil is sourced from Singapore and its costs have jumped by around 12%.

Across the Tasman, the price of petrol is tipped to rise by up to 6c a litre over the next fortnight as the effects of the global financial crisis fade away. The crisis saw petrol prices plunge as people used less oil.

Australians are now being warned by the CommSec, an Australian stockbroking firm, that those days are over and they are going "to have to share some of the pain" of rising world oil prices.

Shell NZ spokeswoman Jackie Maitland said it was company policy not to speculate about pricing, but warned volatility in the international market would affect petrol pump prices here.

"We're very dependent on what happens internationally, which we've got no control over," Maitland said.

Last week's price rise at the pumps was the first in a month and followed a $US5- $6 jump in oil barrel prices. Maitland said the harsh European winter, which had seen record low temperatures and heavy snow blanketing parts of the UK, was likely to further affect barrel prices, by driving up demand for heating fuel, which would in turn increase the price motorists paid for their petrol.

If petrol prices continue to rise, it could put upward pressure on New Zealand's inflation rates - and therefore interest rates - and slow growth in the economy, as businesses grapple with increased expenses and consumers cut back spending in other areas to leave room for petrol buying.

Crude oil hit a record $US147 per barrel in July 2008, which in turn saw record NZ pump prices of up to $2.20 a litre.

From here.