New Zealand drivers have been told to brace for another sharp jump at the pump, with a fuel company boss forecasting petrol will climb 15 to 20 cents a litre within the next couple of weeks as renewed conflict in the Middle East pushes crude oil back up. It marks the return of a price shock that had only just begun to ease, and it lands squarely on households and businesses already stretched by the cost of living.
Waitomo Group chief executive Simon Parham told RNZ’s Checkpoint on 23 July that he expected prices to rise 15 to 20 cents a litre over the coming fortnight, taking a litre of 91 octane close to $3 and diesel to around $2.50. He said the latest trigger was a tanker reportedly struck by an unknown projectile off the coast of Saudi Arabia, which followed United States President Donald Trump threatening to bomb Iranian infrastructure in response to any attacks on ships passing through the Strait of Hormuz. Ukrainian drone strikes on Russian refineries were adding to the pressure. You can read the full RNZ report here.
“I’d forecast that we’d be going close to $3, just a little bit under. But on diesel, about $2.50. So that’s where I’d sort of see it pan out in the next one to two weeks,” Parham said.
There was some comfort in his outlook. Parham said he did not expect prices to climb back to the peaks seen in March and April, when a litre of 91 reached around $3.48. He put that down to a rebalancing in the global system, with more crude now flowing from countries such as the United States, Brazil and Guyana through to refineries. China had also relaxed its restrictions on petrol and diesel exports and was selling more into international markets, easing some of the strain on supply.
He also suggested oil markets had stopped reacting to every word from the White House. “I think the market started to shrug their shoulders and say this is the new normal. The days of him talking the market up or down seem to have gone,” Parham said. That points to a market now driven more by physical supply and shipping risk than by political rhetoric, which makes the current tanker and refinery disruptions harder to shrug off.
The renewed rise comes after a brief reprieve. Prices had been drifting back from their wartime highs over recent weeks, and by Thursday the average price of 91 sat at around $2.89 a litre, according to the Gaspy fuel monitoring app. Parham said demand had begun to recover after collapsing in April and May, but that motorists were still being cautious. “As we’ve come back into June, people started to purchase a little bit more, but when I look at our numbers people are topping up, they’re not filling up,” he said.
The warning from the retail side is matched by a grim read from the bank economists. Westpac chief economist Kelly Eckhold, who has tracked the fuel crisis through the year, told RNZ on 24 July that the shock was far from finished. “No, no, it’s not over by any stretch of the imagination, and the prognosis doesn’t look good,” he said. His comments are covered in this RNZ story.
The numbers behind the warning are stark. On Thursday, the price of Brent crude oil hit a six-week high of around US$96 a barrel, or roughly NZ$165, as Iran and the United States continued to trade fire over control of the Strait of Hormuz, the narrow channel through which a large share of the world’s oil is shipped. Adding to the worry are threats to the back-up route through the Red Sea, where Iran-backed Houthi rebels in Yemen have again been targeting shipping. New Zealand imports all of its refined fuel, which leaves the country exposed to every twist in those far-off waters.
That exposure feeds straight into the cost of living. Stats NZ Consumer Price Index figures for the year to June show petrol accounted for almost a quarter of the annual rise in inflation, with diesel the next biggest contributor. Every lift at the pump also flows through to the price of freight, food and just about anything that has to be trucked, which means the effect is felt well beyond the people filling their tanks. For a household already juggling rent, mortgage payments and grocery bills, another 20 cents a litre is not a rounding error.
Businesses that run vehicles feel it first and hardest. Couriers, tradespeople, transport operators and farmers all watch diesel closely, and a sustained lift squeezes margins that are already thin after a long stretch of weak demand. Some will absorb the cost and some will pass it on, but either way it works against the fragile recovery that forecasters have been hoping to see take hold in the second half of the year.
For drivers, the practical advice has not changed. Shopping around still pays, because the gap between the cheapest and dearest stations in a town can be 20 cents or more, and apps that track local prices make it easy to find the difference. You can follow how prices are moving in our weekly New Zealand fuel price tracker. Whether the latest forecast proves right will come down to events thousands of kilometres away, in shipping lanes most New Zealanders will never see but pay for every time they fill up.
Have you changed how you drive or where you fill up as fuel prices have swung this year? Share your experience in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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