Statistics New Zealand reported on Monday that diesel prices fell 12.1 percent in July, the third monthly fall in a row. The weekly data says that run is already over.
Diesel bottomed out at a national board price of 243.0 cents a litre in the week ending 17 July, according to the Ministry of Business, Innovation and Employment’s weekly fuel price monitoring. By the week ending 7 August it was 271.7 cents, and in the latest week, ending 14 August, it was 270.1 cents. Diesel is 27.2 cents a litre above its July low, and almost all of that rise happened while the July figures were still being compiled.
Board prices listed by CardLink PriceWatch today put most main brand diesel between $2.60 and $2.75 a litre, with a median of $2.67 across BP, Caltex, Mobil and Z sites. Gull was cheapest at $2.446 in Auckland and the Bay of Plenty, and a handful of rural and specialist sites were listed above $2.90. The average across all brands and regions was $2.70, which is a snapshot of posted prices rather than a volume weighted national average, but it sits almost exactly on MBIE’s 14 August figure.
On MBIE’s weekly board prices, diesel is now 43.6 percent dearer than it was a year ago and 81.9 cents a litre above where it sat on 27 February, the last week before the Strait of Hormuz closed to commercial shipping. It is also 114 cents below the April peak of 383.8 cents, so the picture is a partial recovery that has stalled and turned.
Explore the data. Newswire updates these numbers every week, with this week’s price, the full cost breakdown and five years of history, in our weekly fuel price tracker.
Why the July numbers already look out of date
Stats NZ measures a calendar month. MBIE measures a week. In a volatile market those two things can tell opposite stories at the same time.
Stats NZ prices and deflators spokesperson Nicola Growden said in Monday’s release that “fuel prices decreased for a third consecutive month, following increases in March and April” and that “the recent declines mean prices for petrol and diesel are now below levels recorded in March, although they remain higher than in February”.
Both statements are correct. But the July average was dragged down by the first half of the month, and the second half went the other way. Dubai crude in New Zealand dollars fell to $116 a barrel in early July, then climbed back to $151 by 24 July, eased to $131 in the week ending 7 August and was back up to $145 a week later. The New Zealand dollar has not helped, sitting at 58.7 US cents in the latest week against 59.8 cents in late February.
The wholesale cost of diesel is now well above petrol
The most useful number in MBIE’s table is not the pump price. It is the importer cost, which is what the fuel costs landed in New Zealand before margin and tax.
In the week ending 14 August, the importer cost of diesel was 184.5 cents a litre. For regular petrol it was 133.6 cents. Diesel costs importers 50.8 cents a litre more than petrol, and that gap widened by five cents in a single week. It is the seventh largest in the 22 years of weekly data MBIE publishes. Five of the six larger gaps came during this year’s March and April spike, and the sixth was one week in October 2022 at the height of the European diesel squeeze.
Diesel is still cheaper than petrol at the pump, but only because of tax. Petrol carries 77.3 cents a litre of excise duty. Diesel carries none, because diesel road users pay road user charges instead, currently $76 per 1,000 kilometres for a light diesel vehicle. Add the Emissions Trading Scheme cost and GST and the total government take on a litre of diesel is about 50 cents, against about $1.29 on a litre of petrol.
The result is that the gap between the two fuels has collapsed. Petrol was 32.4 cents a litre dearer than diesel in the week ending 14 August. Across 2024 and 2025 the average gap was 70 cents. Anyone whose business case for a diesel vehicle rested on cheaper fuel is now running on a much thinner margin, and the road user charges bill does not fall when the oil price does.
What it costs the freight sector
Road transport accounts for 77 percent of the diesel New Zealand burns, according to Infometrics chief executive Brad Olsen, who put diesel consumption at 24.2 million barrels in 2025, just over half of all oil products used in the country. His March assessment was blunt. “Diesel is the key risk for economic activity – much more than petrol or avgas,” he wrote.
The arithmetic for an operator is straightforward. A linehaul truck and trailer using about 50 litres per 100 kilometres and covering 120,000 kilometres a year burns roughly 60,000 litres. At 81.9 cents a litre more than February, that is about $49,000 a year in extra fuel on one truck, before road user charges, wages or finance.
That is why fuel adjustment factors have become the main story in freight contracts this year. Ia Ara Aotearoa Transporting New Zealand has been urging members to review the fuel adjustment clauses in their contracts, and chief executive Dom Kalasih told RNZ in May that operators would have little choice but to pass the cost on. “Ultimately, I suspect, all of this stuff, will flow to a consumer.”
Farms, orchards and the contractors who serve them
On farm, diesel is not a discretionary input. Agriculture uses 9.5 percent of the country’s diesel, and Infometrics put fuel at about 11 percent of non wage operating costs for primary sector support services and 5.5 percent for horticulture.
The direct cost is easy to size. Every 10,000 litres a farm buys in a year now costs about $8,200 more than it did in February. The indirect cost is harder to see and probably larger, because it arrives through the contractor’s invoice. Cultivation, harvesting, cartage, stock feed delivery and fertiliser freight all price diesel in, and those bills tend to reset a season behind the pump.
Fishing and coastal shipping
Fishing and aquaculture is the most fuel exposed sector in the country, with diesel making up about 26 percent of non wage operating costs on Infometrics’ numbers. A vessel cannot reduce its fuel use much without reducing its catch, and quota costs, crew and vessel finance do not move with the oil price.
Coastal and Cook Strait shipping has been passing the cost through openly. In May, KiwiRail lifted the Interislander fuel adjustment factor on commercial vehicles to 54.4 percent, from 27.7 percent. New Zealand Shipping Federation executive director John Harbord said at the time that “the Cook Strait ferries, at the moment, are spending approximately about $600,000 more a week on diesel [than] they were previously, and so you know they can’t absorb that amount of cost increase themselves”. The Interislander factor is reset monthly, so the current figure will differ.
Construction and earthmoving
Construction is one of the most diesel intensive sectors in the economy, and it shows up fast in cost indexes. QV CostBuilder’s update on 3 August found diesel prices down 20.7 percent month on month, with excavation rates down 4.5 percent as a direct result.
QV CostBuilder spokesperson Martin Bisset said excavation “relies heavily on machinery and transport, so when diesel falls, that tends to show up in the numbers pretty much straight away”. He also warned that “the recent drop in diesel has helped keep construction cost growth in check, but fuel prices remain highly volatile”.
That warning has aged well. The same mechanism works in reverse, and the August rebound in diesel will feed back into excavation, piling, demolition and cartage rates in the next update.
For operators who cannot pass the cost on, the only lever left is burning less of it.
The difference between engine generations has become a cost question rather than a technical one. A modern DEUTZ diesel engine can be far more efficient than the one it replaces, and operators notice that a lot more at $2.70 a litre than they did at $1.80.
What the rebound is worth nationally
If New Zealand keeps burning diesel at the 2025 rate of 24.2 million barrels, that is about 3.85 billion litres a year. At 81.9 cents a litre above the pre crisis price, the country is spending roughly $3.2 billion a year more on diesel than it was in February.
That is a rough figure. It assumes volumes hold up, which they may not, and it counts every litre at the same price when large users buy on contract. But it gives a sense of scale, and it lands disproportionately on the sectors that make and move physical things.
What could change it
Three things drive the number from here. The first is what happens in the Gulf, which sets the crude price and, more importantly for diesel, the margin refiners earn on distillate. The second is the exchange rate, because New Zealand buys refined fuel in US dollars and the dollar is weaker than it was before the crisis. The third is importer margins, which MBIE put at 34.2 cents a litre for diesel in the week ending 14 August. That is down from 47.4 cents a week earlier, because the cost of the fuel rose faster than the price on the board, but still well above the 15.1 cents importers were working on in late July.
On the latest week the climb has flattened rather than reversed. The price on the board barely moved, while the cost behind it went up, which is usually a sign the board price has further to travel.
Our fuel price tracker updates every Tuesday with the latest national price, the full cost breakdown and how this week compares with last year.
Are you seeing diesel costs feed through into your work or your invoices? Tell us 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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