Petrol prices have reached a new high of $2.40 per litre in some areas of New Zealand, and the price could go up even further for a number of circumstances, an expert says.
Across much of the South Island and in Wellington people are paying $2.40 or more for 91 at the pump, while in Auckland prices are around $2.30 a litre, according to PriceWatch.
It comes just days before the petrol tax increases by 3.5 cents per litre on Sunday.
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Newsroom Pro managing editor Bernard Hickey says petrol prices could soon reach $2.50 per litre because "you've got a perfect storm of things happening" in New Zealand.
"You’ve got the New Zealand dollar quite weak... and then of course you've got those petrol taxes coming in, both in Auckland and the rest of the country in the next couple of days," he told The AM Show on Wednesday.
Another factor to consider is the unrest in Venezuela and the Middle East, Mr Hickey said. Saudi Arabia, Iran and Iraq have a combined 60 percent of the world's proven crude oil reserves, according to the Organisation of the Petroleum Exporting Countries (OPEC).
"Remember, Iran for a long time wasn't producing any oil, then we had the release of the sanctions at the end of [Barack] Obama's leadership, and so that oil came onto the market," Mr Hickey said.
"But with Trump making so much noise and cancelling this nuclear deal, that is pushing some of that oil off [the market] and it's also scaring off a lot of Iran's partners," he added, reflecting on Mr Trump's Iran-bashing speech at the UN this week.
Mr Trump lashed out on Twitter earlier this week, demanding OPEC to increase oil supply and bring prices down, after the group announced its decision to hold supply constant.
On top of that, petrol prices are going up because of the Government's desire to put more people into electric cars, Mr Hickey said. But the "capital costs of electric cars needs to change because they are just too expensive."
The Government has said it will soon offer incentives to New Zealanders looking to purchase electric vehicles, to move people away from traditional cars that burn fossil fuels. New Zealand currently has just around 10,000 electric cars on the roads.
Climate Change Minister James Shaw said earlier this month that one idea the Government is looking at is introducing a 'feebate' scheme, in which high emission vehicles would incur a fee, while lower emission vehicles would receive a rebate.
But Mr Hickey warns the feebate scheme would be a risky move for the Government, because "ute drivers are [then] effectively paying for the electric car that the leafy Ponsonby homeowner is going to use to drive to work."
"Politically, the Government will have to be very careful about how they're going to introduce this scheme," he said.
Further 3.5 percent petrol tax increases will be introduced in 2019 and 2020. Road user charges will see the same increases on October 1, and in 2019 and 2020.
Newshub.
