Retail petrol prices

IBISWorld expects the average retail price of petrol to fall 2.0% in 2025-26, to 263.1 cents per litre.Price surges caused by Russia-Ukraine disturbances and previous OPEC+ cutbacks are progressively easing, resulting in lower average crude and refined product prices compared to their highest levels. Commodity forecasts predict Brent oil prices to fall in 2025-26 due to weaker global demand and more non-OPEC supply, alleviating the upward pressure caused by previous supply shocks. Sanctions and other disruptions continue to hamper Russian oil exports and production, with OPEC estimates showing that about 10-15% of pre-war export volumes and around 30% of current export flows are at danger or already reduced. Global prices remain above pre-pandemic norms. OPEC producers have taken a more conservative approach to production, but the cartel still tightly monitors supply. This means that geopolitical tensions and policy adjustments may swiftly tighten the market and contain any lasting drops in oil, putting upward pressure New Zealand fuel prices.

Global crude oil prices continue to have a significant impact on New Zealand petrol prices, with worldwide benchmarks being much higher than pre-pandemic levels, albeit a slight decrease from 2022 peaks. Over the last five years, volatility has remained due to altering OPEC production tactics, geopolitical tensions, and changing expectations for global demand, while variations in the New Zealand dollar have impacted the local currency cost of imported petroleum.

As COVID-19 limitations lifted and mobility recovered during 2021 and 2022, road transport and aviation demand revived, contributing to greater refined fuel consumption and pump prices from lows in 2020. At the same time, manufacturers progressively reversed previous output cuts, although supply discipline and continued interruptions like bans on Russian exports helped maintain high prices.

In 2024 and 2025, slower global economic growth and growing non-OPEC supplies are likely to moderate oil prices, easing pressure on New Zealand fuel prices in 2025-26. Nonetheless, the market remains susceptible to geopolitical events and coordinated producer activities.

As crude oil is priced in US dollars, movements in the value of the New Zealand dollar relative to the US dollar can cause volatility in retail petrol prices. Over the past five years, the value of the New Zealand dollar has depreciated against the US dollar. This has meant that each New Zealand dollar can effectively buy a smaller amount of crude oil on the international market, which has placed upward pressure on retail petrol prices in New Zealand. The Russia-Ukraine conflict drove deficits in the global supply of crude oil, which hiked oil prices and retail fuel prices in recent years. Overall, IBISWorld forecasts the average retail price of petrol will rise at a compound annual rate of 6.3% over the five years through 2025-26.