Nelson motorists pay some of the highest prices in the country for their fuel, but unlike other centres they cannot shop around for lower prices because the variation between all petrol stations can be as little as one cent per litre.
In the latest Commerce Commission quarterly fuel monitoring report, Whangarei was the only place that had higher petrol prices than Nelson City and the variation between all fuel companies in Nelson was just one cent per litre for Regular 91.
That is compared with a variation between petrol stations of 52 cents per litre in Auckland and 33 cents per litre in Wellington for the same period. The figures are based on the daily price variation (most expensive retail site minus the least expensive site), averaged over the quarter.
The New Zealand Automobile Association principal policy advisor on fuel prices, Terry Collins, says that means Nelsonians do not have the option of shopping around for petrol stations with lower prices and have to pay the high price.
He says it has been known for some time that Nelson and Tasman fuel prices are high, but the minimal price variation in retail prices shown in Nelson has slipped under the radar until now.
“What is worse is that it gets worse. Over four quarters, it was six cents per litre variation in Nelson and then four cents and then two cents and now one cent.
“I feel sorry for Nelson motorists because they have no option.”
He says businesses tend to charge what the market will sustain. To rub salt in the wound, he says Kiwis are paying about AUD$1 per litre more than their Australian counterparts.
The Commerce Commission’s latest report has prompted it to ask major fuel companies to explain why there are concerning price anomalies around the country. Its report covers nine centres, including Nelson City which generally has similar prices to Richmond.
The fuel-finding app Gaspy, which sources thousands of fuel price observations around the country every day, recorded prices in Nelson early this week up to $3.02 per litre for unleaded 91 and Richmond up to $3.035 per litre. The cheapest petrol on the same day on its website was at a petrol station in Waikato selling 91 at $2.697 per litre.
More competition is in the wings for Nelson and Tasman though as Waitomo Group’s owner Jimmy Ormsby says the independent fuel supplier is actively looking for a site in Nelson or Richmond to build a new petrol station.
“Our model is to go in and disrupt the market and offer Kiwis a fair price for their fuel. We pride ourselves on keeping the industry honest.
“We’ve been looking in the region for a while and it has been difficult to find a property that is in a location that works.”
Nelson Mayor Nick Smith says he is very concerned that the petrol price is now hitting $3 per litre and the lack of price variation reinforces the commission’s reasoning for questioning the industry.
Episode 15 - “I want to be New Zealand’s biggest company.” — The Nelson Pod
“The problem isn’t just the direct costs for families struggling with the cost-of-living crisis, but that it flows on to the cost of almost everything, whether it be the tradesperson or goods that have to be transported.
“The next hard question is why Nelson is amongst the costliest places for fuel when we have an oil terminal at Port Nelson. I can understand the cost of some remote communities being higher because of road transport costs to get there. But it seems very unjustified in Nelson.”
