"The dramatic rise in fuel prices was a result of a $10 per barrel spike in crude oil prices," says AA Motoring Affairs General Manager Mike Noon.

"In anticipation of a looming increase, the AA asked oil companies to exercise restraint, and so they initially increased prices by six cents per litre. After two days, international prices hadn't receded, so most companies raised prices by another six cents except Shell and Gull, who only went up four cents," Mr Noon said.

By month end, 91 octane was retailing for $2.11 cents per litre at most outlets in the main centres, with diesel selling for $1.84 per litre, up from $2.01 and $1.74 respectively. The exceptions were Gull, who were one cent cheaper, and BP whose prices remained two cents higher per litre.

At the same time prices were rising, the Government confirmed details of a review into fuel prices. The Ministry of Economic Development has commissioned independent consultants Hale & Twomey to consider the conclusions of an Australian review for its applicability in New Zealand, as well as investigating other aspects of the New Zealand fuel market.

Mr Noon says "the AA welcomes the fuel price review, which follows our call in May for an independent inquiry. But we need to be realistic about the outcomes. Most people realise that the prices are driven by international factors and that it's unlikely a review will result in significant savings at the pump. But that's no reason not to undertake a review, as we need to better understand how the New Zealand market works and how competitive it is."

ACC levies rise

New Zealand has a compulsory personal injury insurance scheme to cover injuries caused by road accidents, called ACC. The ACC levies are set each year to cover actual costs of the scheme, and are split between registration and, for petrol users, fuel tax.

From 1 July the ACC levy on petrol rose by two cents per litre, and the annual licence fee for a petrol car increased $28 to $211.84. Diesel users pay all their ACC through vehicle registration, which rose by $55 to $336.69 for a 12-month licence.

For more information contact

Mike Noon
General Manager - Motoring Affairs
New Zealand Automobile Association
T. +64 4 931 9984
F. +64 4 931 9964
M. +64 21 659 704
E. mnoon@aa.co.nz

The New Zealand Automobile Association is an incorporated society with over one million members. It represents the interests of road users who collectively pay over $2 billion in taxes each year through fuels excise, road user charges and GST.