5 Dec 2015

Petrol prices could drop as production stays steady

12:15 pm on 5 December 2015

New Zealand petrol prices could slip lower after oil producers meeting in Vienna failed to agree to cut back on crude oil production.

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Photo: 123rf.com

The price of Brent crude has more than halved in 18 months, due mainly to high production from fracking and horizontal drilling in the United States and heavy output in Saudi Arabia.

An attempt by oil producers to cut production to support the price of oil failed yesterday and the pending return of Iran to oil exporting after years of sanctions could push oil prices even lower.

Petrol prices in New Zealand have fallen by around ten cents a litre in the past year, even though the dollar has fallen as well.

Some price drops have been larger due to local discounting or other factors.

Further falls in petrol prices are likely as long as the dollar holds up, but this was not all good news, as low oil prices discouraged the use of cleaner alternatives.

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