How is America and Iran’s trade deal affecting NZ fuel prices?

Working within strict timeframes, encouraging best safety practices and ensuring vehicles are operated efficiently are perhaps the three most important elements that define a good fleet manager. To excel in this latter component, you'll want to stay abreast of fluctuations in the industry, which involves keeping a finger on the pulse of New Zealand petrol prices.

The price of oil is the cheapest it has been since April.

How will cheaper oil affect New Zealand fuel prices?

Earlier this week, the price of oil fell about $4.50 per barrel to around $75.50 – the lowest seen since April. While it can be challenging to pinpoint the exact cause of such slides in the market, in this case America and Iran's impending trade deal is one significant factor driving the drop in prices. Iran, home to the fourth-largest oil reserves in the world as reported by CNN, has had limited exporting options in years gone by.

This looks set to change in the next few days, as America looks to lift sanctions on Iran's oil exports – a move that has the potential to saturate the market in crude. While both fleet managers and everyday consumers are sure to welcome the associated cheaper fuel costs, an explosion in the availability of oil could wreak havoc on the industry. The deal could potentially push up to a million barrels of crude oil into the global market, pushing prices down even further and threatening Iran's already fragile economy, as reported by CNN.

Here in New Zealand, fuel card owners already have something to smile about, with petrol prices dropping two centres per litre in recent days, according to the Automobile Association (AA). 

The deal between America and Iran could see New Zealand enjoying cheaper fuel prices.The trade deal between America and Iran could see New Zealand drivers enjoying cheaper fuel prices.

How are local petrol prices looking at the moment?

The AA also revealed the average cost of petrol in New Zealand. Prices were identical across Auckland, Wellington and Christchurch:

  • 91 Octane – 209.9 cents per litre
  • 95 Octane – 218.9 cents per litre
  • Diesel – 129.9 cents per litre

While a trip to the petrol station today might save you a dollar or two compared to doing so in recent months, the AA claimed that the reductions do not truly reflect the change in oil prices. As a result we may see even greater movement and cheaper fuel prices in the coming days and weeks.