Petrol prices

Stuff reports:

Energy Minister Judith Collins has vowed to “get to the bottom” of rising petrol margins, signalling an announcement of an inquiry could come next week.

As official figures suggest the margins Kiwis are paying to fill up at the pump rose again in 2016, and have doubled over the past decade, the AA claims two price rises in January came despite the price petrol companies pay being flat.

The AA has called for petrol companies to explain what is going on, with areas including Wellington and much of the South Island frequently charging motorists 30c a litre more than towns such as Levin and Masterton, despite being further from where fuel is imported.

I think an inquiry would be useful, and have said so previously when Stuart Nash asked for one. The margin between wholesale and retail prices has risen massively over the last decade and this suggests the market isn’t very competitive.

An inquiry could be useful to look at how to improve competition.

Part of the problem is that people tend to choose their petrol station on location (closest to them) rather than shop around. And part of the challenge is there is no easy way to know on any particular day which petrol station is cheapest.

An idea I had some years ago was a petrol prices app. It could be done as a public-private partnership with say MBIE and the AA where every day the petrol prices for every petrol station is updated and displayed. And users could configure it to show the prices of every station within x kms or y minutes drive. Then you could make an informed decision about whether it is worth driving an extra km to fill up, if it will save you say $3.