Simon Parham: Waitomo Group CEO on the impact of the Middle East conflict on fuel prices

More people have been filling up at petrol stations as prices climb.  

The Waitomo Group says there's been a 15-20% increase in demand in the past week. 

Chief Executive Simon Parham says pump prices have gone up from about 10 to 20 cents a litre.  

He told Mike Hosking it's because they buy their product on a weekly basis.  

Parham says with short sharp shocks it's very hard to avoid price increases. 

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Episode Transcript

Speaker 1 (00:00):
Part of the problem, of course, of having no real
ability to work out what happens next is to what
extent we start to guess and make it up. So
the oil story you've just heard, we're back below one
hundred so and oil touches everything economically, of course, doesn't it.
So what's happening at the bows of Simon perim As,
the CEO Tomo Fuel?

Speaker 2 (00:15):
Good morning, Good morning, Mike.

Speaker 1 (00:16):
I don't want to sound facetious about this, but is
this good for business at the moment or not? Are
we into this in lining up and getting as much
petrol as we can get our hands on.

Speaker 2 (00:24):
Well, we've certainly seen an increase in demand, so over
the last week we sent of fifteen to twenty percent
increase and people filling up. They've obviously read the headlines
and filling up a little bit and often if they can.
But is it good for business the high fuel prices go.
I don't think it's good for anyone because they're just
dampings to mart.

Speaker 1 (00:41):
Do you worry? The ComCom was instructed by the Financial
Ministry yesterday to keep a BDI on how you guys behave?
Are you behaving? Oh?

Speaker 2 (00:49):
Certainly? And I think that's the ComCom feel that they
need to. Then I welcome it, and I think it's
a good opportunity to look at the entire supply chain
that imports, wholesale and even the retail pump price, because
I think Zeland is in the cusp of a very
fragile economic recovery, so we don't need gold plated pricing
through the supply chain.

Speaker 1 (01:06):
A million texts so far going, the oil hasn't come through,
the ships are still at sea. Why am I paying
so much more? So quickly? The answer is what well the.

Speaker 2 (01:17):
Industry price is on a replacement cost basis, but for
the likes of what Tima, we buy on a wiki
basis and we wash through that product through our system
every sort of three to four days, so you know
we're buying the more expensive product now. And I guess
when you've got a short sharp increase like this, there's
no escaping the higher fuel prices.

Speaker 1 (01:37):
Yeah, do you concur with the Prime minister supply at
the moment, what we've got in the country, what's on
the sea at the moment, We're okay?

Speaker 2 (01:45):
Yeah, I agree, I think we're okay. It's not a
supply ish at the moment, what we've got as a
price issue, because there's a lot of geopolitical risk price
into the market.

Speaker 1 (01:54):
Right, what's the byte point for punters where they can't
afford it and we'll catch a bus.

Speaker 2 (02:01):
I think that will get towards the three dollars three
dollars fifty mark, and I think on diesel about the
same and that's where economic activity will stop and then
people will just look at alternate and opportunities to transport.
So I think once it gets over that three dollar mark,
that's that's a point where things really do get tough.

Speaker 1 (02:21):
I think we need to say calm, don't we, Because
I mean, what you saw with oil yesterday at one
twenty and you're seeing it this morning at ninety nine.
I mean things change rapidly within a day. Ninety nine
is not one twenty or anywhere close to it, is it?

Speaker 2 (02:34):
No? Absolutely, it dropped quite significant overnight Brent crude, the
Singapore flats pricing that did close twenty dollars a barrel higher,
But obviously that market closed before the G seven country's
announcement about being ready to act if necessary around the
strategic reserve. So it is volatile, and I think We've
only really been in this for a week and a half,

(02:55):
so it's short, it's sharp, and you know, we just
need to take it every day that it comes.

Speaker 1 (02:59):
I know everybody he wants answers, and they've all got
the questions crystal ball stuff. We don't know, do we?
I mean, isn't that the honest answer? We don't know absolutely.

Speaker 2 (03:07):
And it's these commentators saying where it's going to go,
then they should be doing oil futures because I'll be
making more money than commentating on where it's going to go.

Speaker 1 (03:15):
Well, said Simon Perum, who's the CEO at Why TIMEO Mike,
I appreciate you confident about the oil price issue. I
don't share your confidence. Damage, refineries, export infrastructure make this
a prolonged issue. It's not just a shipping logistics issue.
The crackspread will be the next biggest issue, and we'll
see this manifest and shortages of middle distillate, diesel and
jet fields. Cargoes of these two products already being diverted

(03:35):
from Africa to Asia while en route. The issue has
a lot of nuance. Appreciate it.

Speaker 2 (03:40):
Larry For more from the Mic Asking Breakfast listen Live
to News Talks.

Speaker 1 (03:45):
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