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I would like to know why 91 octane petrol is 45c cheaper per litre in Australia.

It seems most goods and services in New Zealand including petrol are well overpriced compared to our friends in Australia.

Angela

From the "Ask Jake" archives - 2 September 2009

I have asked our Wellington office (who monitor fuel prices) to answer your question.

Comparing NZ fuel prices with overseas countries is never easy as there are several variables.

For example Australians pay 38.143 cents per litre in excise tax and 10% GST, versus our 53.129 excise and 12.5% GST.

And as of recently, the NZ$ has been worth around A$0.80.

So, at a retail price of A$1.20 in Sydney, less Aussie tax and GST, this equals A$0.7095.

Converted into NZ$ this is NZ$0.887. Add NZ taxes and GST equals $1.60 compared to the current retail price of $1.69/litre.

The 9c/l difference can be explained by the greater price volatility in Australia, particularly in the big cities where there is more competition from privately-owned service stations, and where prices can vary by as much as 15c per litre during a single day with retailers offering discounts on certain days during the week.

Check their prices again on the weekend or in inland towns and they may easily be 15c higher which means Aussies are paying more than NZ, whereas in NZ prices tend to be the same throughout the country except really remote locations.

Oil companies in NZ average the cost of transporting fuel to main provincial towns and cities and charge the same national price, whereas if they used the Australian model, the Auckland price would be cheaper for example.