TODAY |

AA calls on NZ petrol companies to think twice about pushing up prices after Saudi oil site attack

The Automobile Association (AA) is calling for fuel companies to think twice about hiking up their petrol prices in response to the weekend drone attacks at Saudi Arabia's massive oil site.

On Sunday, drone attacks on the world's largest oil processing facility in Saudi Arabia and a major oil field sparked huge fires and halted about half of the supplies from the world's largest exporter of oil. The US tried to build its case today that Iran was behind the fiery weekend attack, but Iran has denied the allegations.

A third of the refinery hit is back up and running, but it's still unclear how long it'll take to restore the rest of it.

Your playlist will load after this ad

The attack, carried out by the Houthi rebels, knocked out half of its oil supply.

AA principal advisor Mark Stockdale told TVNZ1's Breakfast this morning the sharp increase in barrel prices could trickle down to New Zealand.

"It's pretty common for fuel companies to increase their pump prices very quickly after an increase in the commodity price - so the following day, which is today," he said.

"So it looks like we've seen oil prices up around about $8 a barrel yesterday and a rough rule of thumb is that a $1 increase in the barrel price equates to 1c at the pump."

While there are alternatives, Mr Stockdale said New Zealanders were "pretty reliant" on their cars.

He said the "only reasonable thing" would be for fuel companies to spread an increase over the next few days, rather than pushing prices up in one day.

Your playlist will load after this ad

The crude oil price surged today then dropped slightly and Megan Woods says NZ is not at crisis levels. Source: Q+A

"The AA are saying, if nothing else, we'd like to spread that [price increases] over a few days and that would actually give us time to see what happens with those commodity prices over the next few days.

"This might just be that initial spike, you know, on the Monday following what happened over the weekend and things might settle over the next few days as the market sees how comfortable it is in terms of the global supply.

"It would be a little bit premature to pass all that increase on and then suddenly see that the commodity price drops the following day. It would be nice if we could avoid some of that fluctuation by just pausing and just seeing what happens over next few days before passing all that increase on to motorists."

Your playlist will load after this ad

President Trump is threatening retaliation over the drone attack. Source: 1 NEWS

Your playlist will load after this ad

Principal advisor at AA, Mark Stockdale, talked to TVNZ1’s Breakfast about how the attacks could impact Kiwi motorists. Source: Breakfast