Waitomo's chief executive says the company will drop fuel prices today in the wake of US President Donald Trump's looming deal to end the war with Iran.
Early in the war, Iranian attacks on ships brought traffic in the Strait of Hormuz — through which a fifth of the world's oil and natural gas passed before the conflict — to a near standstill. Trump implemented a blockade in response.
Yesterday, US president Donald Trump said the US and Iran reached an interim deal aimed at ending the war and reopening the Strait, with the expectation this could bring down oil prices which had surged well above $3 per litre following its closure earlier this year.
Prime Minister Christopher Luxon and Finance Minister Nicola Willis have urged fuel companies to pass on any oil price drops to consumers, in the wake of the deal.
Waitomo's chief executive Simon Parham told RNZ he expected there would be "immediate relief" as markets soften in the wake of Trump's deal.
"I think where we're standing from at Waitomo, and listening obviously to the Prime Minister as well, I think we're going to back the President on this one. He says he has actually made a deal and the Strait is going to open.
"So we're going to drop our fuel prices on 91 to $3 or below, so $2.99 dot nine or below across our network, and that's happening now," he told RNZ.
Parham said diesel would also drop to around $2.75 or below across various markets.
He said the company was "front footing" the price decreases that he expected to see implemented in coming weeks.
"Hopefully that market softens to give consumes a more sustainable price deal.
"To have sustainably low fuel prices, that Strait needs to open. We have seen limited movement already in the last 24 hours. But I think we'll see some immediate relief in the market."
Moving forward, Parham said the industry needed to speak about resilience and contingency plans if this were to happen again.
"If the Strait hadn't have opened, we were predicting that prices could have ticked back up in the coming months."
Speaking to Breakfast, Foreign Minister Winston Peters said "we're talking about a deal that hasn't been written yet".
"It's a memorandum of understanding, the details of which we don't know... but at the moment it's a matter of super cautious optimism as to what may be happening."
He said ships may be starting to move through the Strait, but they would take take time to reach intended destinations.
Asked when he thought fuel prices may come down in New Zealand, Peters said: "I think we're waiting well beyond August for that to happen."
"In the nature of the oil supply business there has always been a lot of 'milking of the customer', so to speak, and we've got to do our utmost to ensure they remain honest in terms of the pricing for the New Zealand consumer."
He said he wanted a group to watch prices closely worldwide to hold the companies accountable and ensure new Zealand was getting a fair deal.
The agreement signed electronically is meant to provide a meaningful truce in a monthslong war that has killed thousands across the Middle East, including the top leaders of Iran's theocracy, and raised the prices of fuel, food and other basic goods far beyond the region.
But logistical and military challenges underscored the fragile nature of the deal, which was set for a ceremonial signing in Geneva.
The morning's headlines in 90 seconds, including Donald Trump's claimed breakthrough with Iran, Britain's move to ban social media for under-16s, and a dream FIFA World Cup debut for Cabo Verde. (Source: Breakfast)
SHARE ME