Prepare for higher fuel prices
October 5th, 2011
Fuelling up the car for the summer holiday will be more expensive this year than previously.
The boss of Z Energy, NZ’s largest fuel retailer says the risk of another spike in fuel prices is greater than the chance of the US slipping back into recession.
Mike Bennets says we may have seen the last of sub $2 a litre petrol. He says a shortage of crude oil suitable for making diesel and heating oil as a possible driver of increases as the northern hemisphere enters winter, which increases the prospect of a spike from present levels of $2.09 a litre.
Petrol prices hit an all-time high in May, as the civil war in Libya lowered supplies of low sulphur crude which is ideal for making diesel, as well as the heating oil used widely in the US.
Petrol dropped below $2 a litre for a few days in August but has risen 10c a litre since.
Meanwhile, Bennets says don’t look to the high Kiwi dollar to keep fuel prices in check forever.
He says: “I can’t see the Kiwi dollar sustaining a level of [US] 90 cents plus, and I can’t necessarily see oil going below [US] $90 a barrel.”
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