Your summer road trip could prove more painful at the pump this year, with further Russian oil sanctions due to be introduced as the Government fuel subsidy ends.
It comes after OPEC slashed oil production targets overnight in a decision expected to raise global petrol prices.
At its first in-person meeting since 2020, OPEC PLUS, the bloc of oil-producing countries responsible for the bulk of the world's petroleum, agreed to a production cut much larger than expected.
It's a decision led by Saudi Arabia and Russia. Now, Russia's being accused of keeping prices high to pay for its war on Ukraine, and Saudi of aligning themselves with them.
"We could be accused of wanting to influence [the] market in a negative way. That's everybody's prerogative. You and others will see how we conduct ourselves in the months to come," said Saudi Arabia's Minister of Energy Prince Abdulaziz Bin Salman Al-Saud.
The decision to slash production by two million barrels a day surpassed predictions of a cut of one to 1.5 million barrels, squeezing supply in an already tight market that's heavily impacted by the war in Ukraine.
It sent the price of Brent Crude up by 2 percent to $93.80.
Back home, while the announcement will inevitably lead to higher fuel prices at the pump, AA's principal policy advisor Terry Collins said it might not be as dramatic as anticipated, yet.
"It will have a small impact. I think it may take anywhere between 400,000 to a million barrels a day out, but it won't have the significant impact that two million barrels would have."
Collins said what will drive our petrol prices up further is a ban on most crude oil exports from Russia in December as a result of the war in Ukraine, as well as a planned end to the Government fuel subsidy, or FED, in the new year.
"It's going to be a very difficult time. First we have the overall European winter, then we have the insurance sanctions in December, the FED coming back on in January, and then the other sanctions kicking in in March," said Collins.
With the cost of living already biting, this could add to an already difficult list of priorities for the Government going into the election year.
On Friday, Kiwi providers will have a better idea of the flow-on cost of OPEC's sizeable cut but regardless, we could be in for an expensive summer.
