As petrol prices continue to rise, economists warn that increased conflict in the Middle East could further add to the cost of filling up by 10 to 15 percent. Mike Newton, from the fuel price app Gaspy, noted a recent upswing in prices even before the US attack on Iran and Iran’s proposed blocking of the Strait of Hormuz. He mentioned that the price of 91 petrol had already increased by four cents in the past week alone.
With oil prices seeing a 3 percent lift on Monday (NZT), Infometrics chief executive Brad Olsen commented that the increase was more muted than expected. Meanwhile, Kelly Eckhold, chief economist at Westpac, reported a 14 percent rise in oil prices over the past two weeks, although data from the Ministry of Business, Innovation and Employment on June 13 showed that prices had not yet reflected this impact.
Speculation abounds regarding the potential effects of geopolitical tensions on petrol prices, with experts predicting a possible 10 to 15 percent increase based on current oil price trends. Miles Workman, a senior economist at ANZ, highlighted the influence of the US as a net exporter of oil and the impact of the New Zealand dollar on local petrol prices.
As the situation unfolds, the Reserve Bank may need to react to higher petrol prices affecting broader inflation and inflation expectations, potentially limiting further reductions in the OCR. Keep an eye on how global events and currency fluctuations could impact what New Zealand motorists pay at the pump.
