Inside petrol price wars


The tactics behind Queenstown’s battle at the petrol pump have been laid bare – and they’re less refined than you think.

Mountain Scene asked Caltex, Mobil, BP and Z how it was that on Tuesday night three different prices were showing at the four stations.

Z and BP were the lowest, at $1.899 for a litre of 91 unleaded, Caltex was $1.929 while Mobil’s price was $1.959.
Are price changes dictated by a swirling mix of supermarket vouchers, overseas oil prices and picking complex futures markets?

For Caltex owner Richard Lee it’s simple: prices drop “when they notify us”, he says of Z Energy, which operates Caltex stations these days after it bought Chevron.

Prices at his Gorge Road station dropped twice in two days – once on Tuesday and again yesterday morning.

Fierce competition means different prices don’t happen very often, he says. In saying that, shaving cents off means big losses for Lee.

He’s already bought the petrol sitting in his tanks, so a few cents off per litre can wipe thousands of dollars off his margins.

“There’s 140,000 litres under there, so you work that out.”

He adds: “It’s all volume-based. There’s more money in water, water’s darer than petrol.”

Mobil’s Dan Murphy, the Frankton Rd station owner since 2009, says prices change when he’s advise of a cost price change.

Although he says as an independently-owned station “we make the call on our pricing at any stage”.

He admits to keeping an eye on the movement of other companies.

“Mobil will quite often change last – in some cases that works in the customer’s favour and sometimes it works the opposite.”

They matched the nearby stations, BP and Z, yesterday.

“We have a set margin we charge on our fuel. We won’t change our pricing till we’re advised that our [cost] has changed, regardless of what the competitors are doing.”

BP’s Auckland-based mouthpiece, Shelley Brady, says price variations are the nature of competition.

“We review prices at our company-owned stores every day and, like many other retail businesses, we will independently change our prices to ensure competitiveness in the market.”

Z PR man Jonathan Hill, of Wellington, says simply: “We set prices for Z sites.”

On petrol-tracking website PriceWatch yesterday, the highest listed 91 unleaded price in Otago was $2.039.

Across the country, one Auckland Z station was charging $2.149, while in Waikato a Caltex station was charging just $1.649.

According to the AA, the biggest chunk of fuel prices (49 per cent) is taxes, followed by refined fuel (29 per cent), importer margin (20 per cent) and shipping (2 per cent).