AA Motoring Affairs General Manager, Mike Noon, says "motorists have been spared fluctuating pump prices in response to movements both up and down in international prices, with retail prices falling once during September and staying down."

"To some extent, a climb in the New Zealand dollar exchange rate helped buffer pump prices from a late rally in international crude and refined prices."

The price for a litre of 91 octane petrol fell four cents in September, and diesel dropped six cents, to end the month on $1.96 and $1.54 per litre respectively in the main centres. They have both since dropped another 6 cents.

"That's now nine price falls in a row since the highest ever prices of $2.19 for 91 octane and $1.92 for diesel in early July 2008. It is a trend that must be making motorists smile again," says Mr Noon.

Biofuel sales obligation commences

1 October marked the commencement of the Government's mandatory introduction of biofuel-blended fuels.

"However motorists shouldn't immediately see changes at the pump. Some oil companies have already begun selling biofuel blends, while others are in the process of introducing them in the coming months," says Mr Noon.

Gull is selling a 10% ethanol-blended 98-octane fuel at all its North Island stations, and a 10% ethanol-blended 91-octane at some Auckland outlets. Mobil is offering 3% ethanol-blended 91-octane and a 10% ethanol-blended 98-octane petrol at some stations in the Wellington region

"Our advice to motorists is to keep an eye out for new biofuel blend branding at the pump, and to check whether their car is biofuel-compatible before using the fuel."

• A list of biofuel-compatible cars is available on the AA website: www.aa.co.nz

Move to ultra-low sulphur diesel

Oil companies are beginning to phase in ultra-low sulphur diesel, which must contain no more than 10 parts per million (ppm) by January 2009. This is a reduction on the current diesel fuel that has 50ppm. AA PetrolWatch advises motorists they may notice a change in the colour of diesel as a result of processing changes. The reduction in sulphur levels does not affect performance.