BP lifts petrol price with oil at record, NZ dollar slides

By NZPA

Thursday 18th October 2007

BP raised its petrol price by 3c a litre yesterday, with the other three big petrol companies to review prices today, while world oil prices hit a record overnight.

Oil prices touched a new peak of $US89 ($NZ121.43), getting close to the inflation-adjusted peak of $US90.46 in 1980.

The ramp up in prices comes amidst concerns about possible military action by Turkey in northern Iraq and a potential supply crunch this winter, as well as an inflow of investor money into the oil market.

Yesterday BP lifted its price for 91-octane petrol in this country to 163.9c a litre. Spokeswoman Diana Stretch told The New Zealand Herald she could not guarantee prices would not rise again before the Labour Day holiday weekend.

Caltex, Mobil and Shell said they would look at their prices today.

Petrol prices are moving closer on the $1.77 hit in July 2006 around the time the New Zealand dollar was at a two-year low below US60c.

By July this year the NZ dollar was at a post-float high above US80c , helping keep a lid on the price New Zealanders pay at the pump.

From that peak the kiwi has bounced around, falling sharply this week from near US78c on Monday to be around US74.50c at 8am today, adding to the pressure on petrol prices.

The rise in oil prices also highlights worries about inflation and the possibility the Reserve Bank could decide it needed to raise interest rates to try to contain inflationary pressure.

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