Kiwis could see prices at the pump rise for a while yet as Russia’s invasion of Ukraine continues into its third week, according to an economist.
Across the country, petrol is averaging $2.95 per litre for 91, and $3.38 per litre for 98.
On Friday a Waitomo Group petrol station in the Christchurch suburb of Papanui ran out of 91, 95 and diesel as price hikes came into effect, with other stations also at the risk of running dry.
Waitomo Group said they have been advised by their supplier that costs are increasing and 6pm Friday would see the biggest single price rise the company has ever had, according to spokesperson Greta Shirley.
Diesel has since jumped by 30 cents and petrol by 20 cents, although prices will vary at different Waitomo stations around the country.
New Zealand Institute of Economic Research Inc economist Shamubeel Eaqub told Seven Sharp the steep increase in fuel prices can be attributed to the Russian invasion of Ukraine, which is now in its third week.
“Russia is such a huge producer of oil and it’s been shut off from global markets so all of a sudden, we’ve lost all this oil from markets and there’s fear of what will happen,” he said.
“It’s driven up global prices and that’s driven up the price at our pumps.”
Eaqub warned there is “absolute potential” prices could rise “a little bit more”, but said the “bigger fear” is the sanctions on Russia may remain in place even after the war ends and “that might keep oil prices high”.
“We should be planning for higher prices for a little while. I would have thought that it’s not going to go away quite quickly.”
Read more: Rush to the pumps as petrol group announces 'biggest single price increase'
He said while some New Zealanders may be lucky enough to "work from home a bit more, drive less, carpool, car share" to blunt the impact of the price hike, others may need to look into getting compensation or a wage increase from their workplace.
"It's not just oil - it's just the biggest increase at the moment. Cost of living has just gone up so much but incomes haven't."
Eaqub said there may be some changes in Kiwis' behaviour as people consider smaller cars and driving less as they turn to other modes of transport.
"I hope we'll also see people slowly shifting back towards public transport, walking more and cycling more, but those things usually take a bit longer."
SHARE ME