Pumped up

I went to the gas station to fill up yesterday, as I do every week. I have to admit that I don’t pay a lot of attention to fuel prices, but I had noticed that I seem to be paying a bit more for a fill than I did a few weeks ago. Could this be right? So I checked the price at the pump: $2.26 for unleaded petrol. This can’t be, right? Wellington hasn’t been hit with regional fuel taxes yet, has it? Isn’t that only Auckland? Has that even happened yet? What is going on? This from?Stuff:?Quote:

Petrol prices are within touching distance of?an all-time high, following the third increase in just over a week.

At stations in Wellington, Christchurch and many parts of the country where competition is limited, the price of regular petrol is currently 2.259 a litre.

It is the highest pump price since July 2013, when petrol prices hit 2.269 a litre. End quote

Hang on a minute. Petrol prices back in 2013 were the result of very high oil prices but oil is only about US$70 a barrel at present, so only about half the barrel price of five years ago. Quote:

The latest increase appeared to be led by Z Energy, which also supplies the Caltex stations, with prices rising by 3c a litre on Sunday afternoon.?On Monday some BP stations appeared to match the increased in Wellington and Christchurch.

Z Energy blamed the recent increases on a fall in the value of the New Zealand dollar at the same time as the price of oil has risen.

“The New Zealand dollar?is at its lowest point against the US dollar?since December?last year,” a spokeswoman said.

“Brent crude oil continues to climb, the highest it’s been since November 2014, on the back of geopolitical concerns and the US quitting the Iran deal and reinstating sanctions.” End quote.

Still only $70 a barrel though. And yes, the Kiwi dollar has dropped back a bit.? In December last year unleaded petrol cost $2.10, and the exchange rate for US dollars was $0.71. Now it is $0.69. How does that justify a 16-cent increase in the cost of a litre of fuel? It doesn’t, of course, but that is not my biggest concern.

Let me recap. Oil is US$70 a barrel. The US/NZD exchange rate has dropped about 2.5%. And the regional fuel taxes don’t hit until at least July. So, by July, if nothing else changes, 91 octane fuel will be $2.36 a litre.

What if the oil price rises further, or the dollar drops further, or both? There is no point in speculating about this. We all know what is going to happen. Fuel prices are about to go through the roof.

I won’t say I don’t care for my own purposes, because I do. But I really care for all those Labour voters who thought this government would make their lives better. People on low incomes who are already struggling. This will be an enormous body blow to them.

I know you can’t blame the government for everything, but we definitely can blame the government for this. As fuel prices go up, the price of everything goes up. We are about to be hit with significant inflation and, once again, as it always does, it will hit the poor hardest.

The National government were recognised as business friendly, but even they, in the form of Judith Collins, tried to rein in the oil companies on the issue of price gouging. I really don’t see Megan Woods pulling off a miracle when the government have seen fit to increase fuel prices for their own purposes. In fact, the government have effectively given the fuel companies carte blanche to do what they like. After all, if the government see fit to increase fuel prices, why shouldn’t the oil companies do the same?

We may be about to see inflation hit 10% for the first time in well over a decade. Strap yourselves in, guys. Things are about to get really bad. My sympathy goes to the ones in our society who are struggling already. They have no idea what is about to hit them.