'Not inconceivable' NZ petrol prices could reach $3 per litre within six to 12 months, says transport expert

The escalating price of petrol in New Zealand could reach $3 per litre within the next six months, warns a transport expert.

Road Transport Forum NZ chief executive Ken Shirley says the depreciating New Zealand dollar and the natural volatility of international oil prices could see the cost of petrol get far worse than the current $2 per litre plus levels.

"I hate to be a merchant of doom but it's not inconceivable it could go to sort of $3 a litre," Mr Shirley said on TVNZ 1's Breakfast today.

"The other side of that is it could drive more people into public transport and give a boost to electric cars."

And how soon in a worst case scenario could Kiwi fuel prices break the $3 per litre mark?

"Look I'm very loath to speculate on global fuel prices but given the instability we've got globally, we could expect that within six months, within 12 months. But it is highly unpredictable," Mr Shirley said.

If the fuel price were to reach these heights, those most affected will be rural Kiwis devoid of subsidised public transport, and low-income families working in the outer suburbs of cities, Mr Shirley said.

The depreciating Kiwi dollar is one of the main factors which have risen the price of petrol to it's current level above $2.10 per litre, Mr Shirley said.

Geo-political trends, and the instability of the Iran nuclear deal with US sanctions on the middle eastern country, are also influences.

"Absolutely, that kind of instability, or global outlook could create quite a shock in the global price," Mr Shirley said.

But despite all this, Mr Shirley believes the New Zealand fuel market is competitive considering our isolation. 

"I think we have a very competitive market in New Zealand, we have one of the dearest landed prices in the world because of our remote place on the planet," he said.

"Most of the big oil companies don't actually find the New Zealand market particularly attractive but it is a competitive market, and that's the reality that we can expect increasing prices."

Ken Shirely says the depreciating NZ dollar is responsible for the high price of petrol at the moment. Source: Breakfast

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