Francesca Rudkin: Are you making an effort to get cheaper fuel?

Kerre Woodham Mornings Podcast

As emails keep hitting the inbox—or the letters hitting the letterbox if you’re still supporting the postal system—telling us of price increases for all sorts of things. From the cost of our energy, to insurance premiums, to our favourite streaming service, we're all still keeping a close on our household budgets and doing what we can to try and keep them under control.

So, how far do you go to make sure you are paying the best price for petrol?

For those of us who do not live somewhere with accessible or reliable public transport, or don’t have the guts to put our lives at risk and get on a bike, or can afford an EV, we are at the beck and call of petrol companies and what they can charge us to fill our vehicles.

Now the Commerce Commission is getting in on the act.

Their latest analysis of fuel monitoring data shows retailers are quick to put fuel prices up in response to increased costs, but slower to bring prices down when global oil prices fall or exchange rate changes reduce costs.

It’s known as the rocket and feather approach: prices rocket up with increased costs but float down slowly when those costs decrease.

They have estimated that if fuel companies drop prices as quickly as they increase them when costs change, motorists would benefit by around $15 million a year.

Now that is quite considerable and worth keeping an eye on. But what can the Commerce Commission really do about it? There have been some changes already...

BC: What’s actually changed is that companies like Waitomo and Gull can now more readily get fuel at more reasonable prices. And we’ve seen that, they’ve been much more able to open stations than was the case in the past, and that is driving down prices for Kiwi motorists. So we’ve got evidence that it is working.

MH: How much does the punter play a part in this? In other words, if I wanted to put a bit of energy into it, get a Gaspy app, shop around, there’s, there’s plenty of competition and there’s plenty of price variability?

BC: Yep, especially in a place like Auckland. Look, Terry Collins from the AA has been talking about that in the last day or so, he’s absolutely right. If everyone shops at the lowest priced station, the others are going to have to match.

Now it’s important to note that there is no suggestion of collusion here – or illegal practices, these are large corporates operating in a supply and demand market. There is competition between them – but often the consumer determines as to whether they need to act on that competition. So do you?

Do you use your GASPY app? Do you make an effort to go to the cheapest local station around? Are you doing your bit to inform the petrol companies that you understand the choice you have?

I don’t think the Commerce Commission will be able to do much about this—much like the supermarket situation—except say they will be keeping an eye on things. Terry Collins, the AA Principal Policy Advisor, spoke to Heather du Plessis-Allan last night saying it is a warning to the fuel companies.

TC: I mean, this is a classic shot across the bow by the Commerce Commission, but I’ve been talking to contacts within the industry and they’re very keen because of the optics on it, not least by the media and by the Commerce Commission to ensure that the Auckland Motorists get their full 11.5 cents discount or rebate, the decrease in price, come 1 July. I know one of the large major’s got a big team working on it, trying to get it done by midnight. On that day, it comes into effect across all these stations.

Of course, the big test of the ComCom warning, and consumers power will be in Auckland when the fuel tax is removed from the 1st of July. Aucklanders will expect their gas to be 11.5 cents cheaper immediately, wouldn’t you?

The attention from the Commerce Commission is good. It's a reminder to us all to use whatever power we have, but it’s up to us to make an impact that will help us out at the pumps.

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