Francesca Rudkin: Are you making an effort to get cheaper fuel?

As emails keep hitting the inbox—or the letters hitting the letterbox if you’re still supporting the postal system—telling us of price increases for all sorts of things. From the cost of our energy, to insurance premiums, to our favourite streaming service, we're all still keeping a close on our household budgets and doing what we can to try and keep them under control.   

So, how far do you go to make sure you are paying the best price for petrol? 

For those of us who do not live somewhere with accessible or reliable public transport, or don’t have the guts to put our lives at risk and get on a bike, or can afford an EV, we are at the beck and call of petrol companies and what they can charge us to fill our vehicles.   

Now the Commerce Commission is getting in on the act.   

Their latest analysis of fuel monitoring data shows retailers are quick to put fuel prices up in response to increased costs, but slower to bring prices down when global oil prices fall or exchange rate changes reduce costs.  

It’s known as the rocket and feather approach: prices rocket up with increased costs but float down slowly when those costs decrease.   

They have estimated that if fuel companies drop prices as quickly as they increase them when costs change, motorists would benefit by around $15 million a year.     

Now that is quite considerable and worth keeping an eye on. But what can the Commerce Commission really do about it? There have been some changes already...  

BC: What’s actually changed is that companies like Waitomo and Gull can now more readily get fuel at more reasonable prices. And we’ve seen that, they’ve been much more able to open stations than was the case in the past, and that is driving down prices for Kiwi motorists. So we’ve got evidence that it is working. 

MH: How much does the punter play a part in this? In other words, if I wanted to put a bit of energy into it, get a Gaspy app, shop around, there’s, there’s plenty of competition and there’s plenty of price variability? 

BC: Yep, especially in a place like Auckland. Look, Terry Collins from the AA has been talking about that in the last day or so, he’s absolutely right. If everyone shops at the lowest priced station, the others are going to have to match. 

Now it’s important to note that there is no suggestion of collusion here – or illegal practices, these are large corporates operating in a supply and demand market. There is competition between them – but often the consumer determines as to whether they need to act on that competition. So do you?   

Do you use your GASPY app? Do you make an effort to go to the cheapest local station around? Are you doing your bit to inform the petrol companies that you understand the choice you have? 

I don’t think the Commerce Commission will be able to do much about this—much like the supermarket situation—except say they will be keeping an eye on things. Terry Collins, the AA Principal Policy Advisor, spoke to Heather du Plessis-Allan last night saying it is a warning to the fuel companies. 

TC: I mean, this is a classic shot across the bow by the Commerce Commission, but I’ve been talking to contacts within the industry and they’re very keen because of the optics on it, not least by the media and by the Commerce Commission to ensure that the Auckland Motorists get their full 11.5 cents discount or rebate, the decrease in price, come 1 July. I know one of the large major’s got a big team working on it, trying to get it done by midnight. On that day, it comes into effect across all these stations. 

Of course, the big test of the ComC

Episode Transcript

Speaker 1 (00:06):
You're listening to the Carrywood and Morning's podcast from News Talk.

Speaker 2 (00:10):
Sad B as the emails keep hitting the inbox or
the letters hitting the letterbox, if you're still supporting the
postal system telling us of price increases for all sorts
of things, from the cost of our energy, to insurance
premiums to our favorite streaming service. We are keeping a
very close eye on our household budgets, aren't we in

(00:33):
doing whatever we can to try and keep them under control.
So how far do you go to make sure you're
paying the best price for petrol? For those of us
who do not live somewhere with accessible or reliable public transport,
or don't have the guts to put our lives at

(00:53):
risk and get on a bike, or can't afford an
ev we're at the beck and call of petrol companies
and what they can charge us to fill our vehicles.
We've got to do it right. We've got to do
it to get to work, to look after our families.
You know, it's just part of our lives. We've got
to do it now. The Commerce Commission is getting in
on the act. They've done a study over a long

(01:16):
quite a long period of time. The latest analysis of
fuel monitoring data. It shows that retailers are quick to
put fuel prices up in response to increased demands, but
slower to bring prices down when global oil prices fall
on exchange rates changes. You know, are all exchange rate

(01:36):
changes reduce costs. So basically it's known as the rocket
and feather approach. So prices rock up with increased costs,
but then they just float down gently, nice and slowly
when those costs decrease. I would argue, we already knew this.

(01:57):
I don't know about you, but I've been putting. I've
been paying for petrol or diesel or something for over
thirty years now, and you know, you kind of keep
an eye on the way things are going and prices
and how fast they go up into how fast they
come down. I I'm not hugely surprised by these findings,
but they have estimated that if fuel companies drop prices

(02:19):
as quickly as they increase them when costs change, motorists
would benefit by around fifteen million a year. That's kind
of considerable, isn't it. So what is worth keeping an
eye on? And the commerce commissioner doing this, they're keeping
an eye on it. But what can they really do

(02:39):
about it. There has been some changes, and they have
seen these changes already. The Commerce Commissioner, Brian Chapel, he
was on Mike Costing Breakfast. He says that they're you know,
some things have changed.

Speaker 3 (02:52):
What's actually changed is that companies like Way, Tomo and
Gull can now more readily get fuel at more reasonable prices.
And we've seen that they've been much more able to
open stations than was the case in the past, and
that that is driving down prices for Kiwi motorists. So
I think we've got evidence that it is working.

Speaker 2 (03:09):
How much does the punter play a part in this?
In other words, if I wanted to put a bit
of energy into it, get a gas by app, shop around.

Speaker 4 (03:16):
There's plenty of competition and there's plenty of price by variability.

Speaker 3 (03:20):
Especially in a place like Auckland. Look. Terry Collins from
the AA has been talking about that in the last
day or so. He's absolutely right. If everyone shops at
the lowest price station, the others are going to have
to match.

Speaker 2 (03:32):
There we go. It's really up to us, isn't it.
So once again my question for you is how far
do you go to make sure, you're paying the best
price for petrol. Hey, it's really important to note that
while we're talking about quite a considerable amount of money
that we could all benefit from if these petrol stations adjusted,
that increases and decreases at a similar rate. There is

(03:57):
no suggestion of collusion here, So the Commus Commission, in
the study they're doing, they're not saying that there's any
collusion here. There's no illegal practices. And of course these
large corporations are operating in a supply and demand market.
As we just heard, there is competition between them, but
it's about us. It's about the consumer who determines whether
they need to act on that competition. If you're not

(04:19):
fussed about the price, and you just keep going to
your same local petrol station, then why would they bother
to meet a competitor's rate. Do you use your gasbe
app Do you make an effort to go to this
cheapest local station around you. I'm definitely doing it these days.
And I tell you what, I'm in an area where

(04:42):
I'm very lucky. I've got an option, variety of options
quite close to me, or on routes that I use
to drive to work and back again. So I can
make that decision to go and spend the least amount
of money that I can to put petrol in my car.

(05:02):
And I think that's really important and I think the
more of us that do that, it's sending a message
to the rest of them. So are you doing your
bit to inform the petrol companies that you understand the
choice you have, Because I don't really think that the
Commis Commission will be able to do much about this.
I think it's going to be a little bit like
the supermarket situation. It is great to hear that they're

(05:25):
keeping an eye on things and that might have an impact.
Jerry Collins, who Brian actually mentioned the AA principal policy advisor.
He spoke to the duplicy Allen last night, saying it
is a warning to the field companies.

Speaker 4 (05:40):
I mean, this is a cussing shot across the bail
by the Communis Commission. But I'll be talking to contacts
within the industry and they're very keen because of the
optics on it, not least by the media and by
the Communis Commission, to ensure that the motorists get their
full eleven and a half cents discount or rebate the
decreasing price come one July. I know one of the

(06:03):
large majors has got a big team working on it,
trying to get it done, litting it on Matt Daood.
It comes into effect across all these stations.

Speaker 2 (06:10):
Yes, because of course the big test for this Commerce
Commission warning and an indication of consumer's power will be
in Auckland when that field text is removed from the
first of July. So Auckland will expect their gas to
be eleven point five cents cheaper immediately, wouldn't you. I mean,
I'd definitely be keeping an eye up for that. So look,

(06:32):
I think the attention from the Commerce Commission is good.
It is a reminder of us all to use whatever
power we have. But I think it is up to
us to make an impact that will help out at
the pumps. Can to hear from you. Are you impressed
with the Commerce Commission and what they're trying to achieve here?
Do you think they're actually going to have any say
or sway in the matter here to the power is

(06:54):
with the consumer. Do you have that option? Do you
use it? Do you do you make an effort to
go out of your way to shop and get the
best price gas. And if you are in Auckland, what
do you think the chances are that you're going to
see that eleven point five cents you know, reduced in

(07:18):
the price of petrol. I mean, I would expect all
of it, and I would like to see all of it.
And it's going to be really interesting to see how
petrol companies deal with that.

Speaker 1 (07:29):
For more from Carry Wooden Mornings, listen live to news
talks it be from nine am weekdays, or follow the
podcast on iHeartRadio.