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Gasoline prices at their highest since March 2020 Business News

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Kiwis face more pain at the pump. Photo / Getty Images

The price of gasoline is moving rapidly towards levels last seen in March 2020.

Weekly fuel price monitoring data from the Ministry of Enterprise, Innovation and Employment (MBIE) shows that the price of regular gasoline was currently $ 2.28 per liter for the week se ending June 4, 2021.

This is the highest since gasoline prices exceeded $ 2.28 per liter for the week ended March 6, 2020.

This constant increase in prices is also reflected in the cost of a liter of premium fuel, which stands at $ 2.42 in the latest data. This is the highest level since the week ended February 21, 2020.

These figures put gasoline prices on par with the high levels seen before the impact of the pandemic.

AA’s automotive spokesperson Mike Noon notes that fuel prices vary from region to region, however, due to competition.

“Prices have become increasingly variable between regions or even within cities and suburbs,” he says.

“This makes a ‘national’ price less and less significant and often quite different from what motorists know at their local gas stations. For example, today we can see regular gasoline at $ 2.07 at some sites in Wellington and $ 2.18 in Auckland, which includes the regional fuel tax of 11 cents.

“In the South Island, prices have become more and more competitive and overall the premium the South Island was paying is no longer evident with prices around $ 2.05 on some sites today. “

Global factors have also had a major impact on oil prices over the past 18 months.

As Covid-19 spread across the world, the demand for oil declined dramatically as the need for transportation declined with people confined to their homes.

This resulted in a massive drop in oil prices, with the price of crude hitting just US $ 18.43 per barrel at one point in the pandemic, according to data from the MBIE.

With the deployment of vaccines and the constant relaxation of containment conditions, demand has returned and the price of oil has continued to rise.

This has had the effect of steadily increasing prices at the pump.

This week, the price of oil has crossed the $ 70 threshold since May 2019.

Oil analysts noted that these increases come as the market remains depressed, as air travel has not approached pre-pandemic levels.

As more airlines reintroduce routes, the demand for oil will only increase.

The Financial Times reported that Opec and other major oil producers, which cut production during the pandemic due to lower demand, are starting to add barrels to the market as consumption grows. improved.

However, it is not clear at this point whether they have sufficient spare capacity if demand begins to rise significantly above its pre-pandemic level of around 100 million barrels per day.

The Financial Times added that given the continuing uncertainty in the market, demand for oil is likely to fluctuate over the coming year.

It also comes amid growing concerns about the specter of inflation, both here and abroad.

Data from the United States overnight showed that consumer prices rose 5 percent year-on-year in May, the highest inflation rate since August 2008 in the United States . Excluding food and energy, core inflation rose 3.8%, the largest increase in nearly 30 years.

In May, Reserve Bank Governor Adrian Orr said the RBNZ saw New Zealand inflation hit 2.6% in the second quarter of this year.

Inflationary pressure has led to forecasts that the Reserve Bank may need to raise interest rates to ward off inflation in the coming year.

RBNZ forecasts now suggest it is on track to start raising the official cash rate in the second half of 2022.

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Source: www.nzherald.co.nz
This notice was published: 2021-06-10 23:16:25

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