Petrol prices across New Zealand are expected to rise soon due to escalating US-Russia tensions and the weakening of the New Zealand dollar, which recently dropped to US55.5 cents.
The price of Brent crude oil has surged above $US80 per barrel in recent days, driven by fresh US sanctions targeting Russia’s energy sector.
Currently, petrol prices range from $2.68 per litre for 91 octane to $3.04 for 98, while diesel stands at $1.95. These prices reflect a slight increase of a few percent compared to last month.
Since mid-December, the price of crude oil has risen by $US10 per barrel, meaning Kiwis can likely expect a further increase of 10-20 cents per litre in the near future.
According to the AA, the US Government’s sanctions include restrictions on Russia’s shipping fleet and related insurance. In response, Russia has been acquiring older oil tankers to continue supplying markets such as China and India, the NZ Herald reports.
However, without insurance, these ships are being turned away from international ports, potentially forcing India and China to look to the Middle East for their oil supplies.
Adding to the uncertainty are questions surrounding the incoming US administration and its potential influence on energy policy and global geopolitics.
While the rising cost of petrol and diesel will have minimal impact on businesses that don’t depend on fuel, it could significantly affect industries such as agriculture, where the upcoming harvest season relies heavily on diesel-powered machinery. On the upside, the falling New Zealand dollar could lead to better returns for exporters.
Given OPEC’s goal to maintain oil prices at around $US80 per barrel, New Zealanders should anticipate slightly higher petrol costs throughout the year.
