Z and BP won't reverse price rise on Wednesday despite oil price drop

Wednesday, 18 September 2019

Trump says it 'certainly' looks like Iran was behind Saudi Arabia oil plants attacks, but US wants 'definitive' proof.

Petrol and diesel will stay 6 cents a litre higher at most service stations than it was last week, after Z and BP decided not to reverse Tuesday's fuel price rise in the immediate wake of easing oil prices on Wednesday.

Brent crude was trading up only about 5 per cent or US$3.30 (NZ$5) a barrel on its level before Saturday's drone attacks on Saudi Arabian oil facilities, which would imply petrol could be about 3c a litre more expensive than on Friday.

But BP and Z said they would not move their prices on Wednesday.

Z chief executive Mike Bennetts said when it increased its prices on Tuesday it 'didn't reflect all of the increase in the price of the barrel, as we had planned to move the price by 3 cents on that day anyway'.

'We took on the other 3 cents because we know it's hard when prices go up so we wanted to keep it affordable as we could,' he said.

**READ MORE:

Gull NZ general manager David Bodger says Tuesday's petrol price rises were 'knee-jerk'.

* Attacks on Saudi felt at pump as Z and BP raise petrol by 6 cents a litre

* Z Energy tips petrol could rise 5c to 10c after attacks

* Saudi Arabia oil sites hit by drone strikes**

BP spokesman Gordon Gillan said there were a number of influences on the price of fuel, including the refined barrel price, which had risen overnight.

Gull New Zealand has promised to keep fuel at its company-owned stores at last week's price until at least Saturday, and its general manager David Bodger described yesterday's price rises by its rivals as 'knee jerk'.

Bodger said the refined price of petrol and diesel on the Singapore exchange was up another 4c and 3.5c, respectively overnight.

That was on top of their 6c and 5.5c price rises a day earlier.

But he said if Brent crude continued to trade around $64 on Wednesday, he'd expect prices in Singapore would be down tomorrow.

Brent crude initially jumped 19 per cent and then appeared to settle up about 13 per cent, or US$8 a barrel, in the immediate aftermath of the attacks on the world's largest oil processing facility in Abqaiq, Saudi Arabia, and the major Khurais oil field.

But prices eased back on Wednesday after Saudi Arabia said it had restored half its lost production and forecast output would return to normal by the end of the month.

Analyst OilPrice.com reported that fresh data from the American Petroleum Institute showing a surprise rise in US petrol stocks last week contributed to the price fall.

At the current exchange rate, a US$1 rise or fall in the price of a barrel of oil should equate to about a 1c move at the pumps.

Bodger said Gull again sold 40 per cent more petrol than usual on Tuesday and the latest oil-price volatility justified Gull's decision to hold prices for now.

'We are very happy to be in the media for not putting our prices up. But the reality is 'why knee-jerk on one day?'.'

'There was not a need to do something, we didn't think, yesterday.'

The situation was very dynamic, he said.

Bodger cautioned it was still difficult to separate truth from speculation in Saudi Arabia.

'They are saying 50 per cent back now and 100 per cent by the end of the month.

'How much of that is propaganda and how much is truth? Goodness knows what is going to happen tomorrow.'