Minister sent stern letter to fuel companies over fuel margins

Energy Minister Megan Woods sent a stern letter to fuel companies over "historically" high fuel margins.

Sent on July 15, Woods said that margins were at "historically high levels at a time when international fuel costs are going down and this is a matter of concern for me, as it will be for consumers".

Two days later, the Government extended its cost of living support payments, which includes the cut to fuel excise tax by 25 cents a litre.

In the letter, Woods said she expected to see "the recent decrease in importer costs to be passed through to consumers at the pump in the coming weeks".

"Sharing the benefit of reduced costs with consumers also provides an opportunity for fuel companies to demonstrate their commitment to continue to pass through the fuel excise duty reduction."

READ MORE: Why petrol prices are creeping back up, despite tax relief

Woods said Ministry of Business, Innovation and Employment monitoring showed "a sharp increase" in fuel margins for July 2-8.

"Compared to the previous week importer margins increased by 43.5% for regular petrol, 32.4% for diesel and 30.9% for premium petrol."

Inflation on Monday hit a 32-year high, with petrol prices increasing 32% in the year to the June 2022, the largest annual increase since 1985.

Diesel prices increased 74%.

Stats NZ general manager Jason Attewell said the average price of 1 litre of 91 octane petrol rose 6.3% to $2.84 in the June 2022 quarter, compared with $2.67 in the March 2022 quarter.

A Z spokesperson said in light of recent declines in Brent Crude prices, "Z responded by reducing prices across our network by at least 15cpl, bringing all sites under $3 on 91 and diesel".

"The decision to move prices over the weekend, ahead of the 8am Monday morning commute, was taken well before the Government’s Sunday announcement."

"It’s important to note that just because crude drops, it may not mean that we drop pump prices by the same amount, as we may have been absorbing some of the previous increases into our margins.

"Z expects that the volatility in our key input cost being the price of refined fuels will continue given the ongoing war in Ukraine. While we work to ensure that the reduction in Fuel Excise Duty (FED) is passed onto our customers, we note that Z’s fuel pricing is localised and therefore the price of fuel will continue to vary between different locations."

1News has contacted the other major fuel companies for comment.