Simon Parham: Waitomo Group CEO on the slumping oil price and potential drop in fuel prices

Petrol prices could be lower in the coming days as the price of oil slumps and the Kiwi dollar stabilises. 

Waitomo Group Chief Executive Simon Parham told Mike Hosking global supply is increasing, while demand is decreasing. 

He says prices are going to hover about where they are, creating a period of good value for Kiwi consumers. 

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Episode Transcript

Speaker 1 (00:00):
Oil price. At the moment, price of oil is falling,
as Andrew mentioned quite a bit. Sixty six yius WT
I sixty six YSS this morning and the Bretons Brent
is sitting at sixty nine or thereabouts. It means a
decent time with the pump, is what I'm trying to say.
Why time I group CEO Simon pirams with a Simon
very good morning to you. Should we have a warning
as we always do in terms of you know, the
oil price at any given time. That's not about what

(00:21):
the wtis or the brents. It's got a whole lot
of other factors in it.

Speaker 2 (00:26):
Oh, there's certainly different factors at play, but I think
we will see an easy and fuel prices with all
those factors that are increasing supply and to demand. At
the moment. You know, we've already seen a ten cent
toleter drop since January, so those prices are definitely coming
through In New Zealand.

Speaker 1 (00:42):
What's going on? Do you see a trend here, something
a little bit permanent for the year or at least
a few months or not?

Speaker 2 (00:48):
Ah Well, I guess if you look at the two
key factors, the lower underlying crew price and you know,
that's lead by Trump and Opex. So on the Trump factors,
he famously said, drill, baby, drill, so we expect more
oil into that US market, so increased supply. Then there's tariff,
which you just talked about, so I guess the consensus
there is that tariffs are not good for trade and

(01:09):
that's leading to lower economic growth, which is a decreased demand.
And then finally Russia, you know, potential easing of sanctions
against Russia, which would leap to increased supply there. And
then on the Opex side, which is probably new to
a few of your listeners, is that they planted out
about one hundred and thirty eight thousand barrels a day
from April, so that's about another two percent increasing global supply.

Speaker 1 (01:32):
So what's you feel on prices low as still or not?

Speaker 2 (01:35):
Well, there's volatility, so I think it's going to sort
of hover about where we are. We are being sort
of held back a bit by that weak New Zealand
dollar at about fifty five cents to the dollar. You know,
that's really the damage is done has been done on
that for the last six to eight months. So I
would say we're probably in a period of good value
for the consumer at the moment.

Speaker 1 (01:55):
Okay, good, while I've got you. There was a report
a couple of weeks ago on margins normally historically apparently
about eleven percent, they'd crept up to fifteen or sixteen.
Do you know what's going on and are you gouging?

Speaker 2 (02:08):
There's certainly no gouging going on. I think there's sometimes
you see margins where they are potentially a little bit
higher than the average, and then they're lower. So you know,
you look across in the year and you always just
look at their average and what you can return for
the business.

Speaker 1 (02:21):
And what happens. Who decides how many meetings are held
and why does that vary on any given day.

Speaker 2 (02:28):
Ultimately it's the market that plays out. You know, we
look at trying to provide a sustainable price and we
want to be competitive in the market at markets where
we operate, so you know, we try to give the
best price we can and try to attract as many
custom as we can. That's with a competitive prices.

Speaker 1 (02:45):
Pleasure to have you on the program. You have a
good week in Simon Perum, who's the one time O
Group CEO?

Speaker 2 (02:50):
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