More fuel competition on way for Wellington

26 October 2018

Wellington Mayor Justin Lester has welcomed the news the Commerce Commission will be granted new powers to allow it to investigate fuel prices.

On-street parking.

The Commerce Amendment Act passed its third reading on Wednesday, which means the Commission will soon be able to investigate markets. The Government has indicated the fuel market will be the first to be looked at.

“It’s a double dose of good news for Wellington motorists tired of paying more for their petrol than others in the North Island,” the Mayor says after fuel company Waitomo earlier this month announced it was opening a station in the capital.

“If the Commission can identify ways to lower fuel prices in the Wellington region then ratepayers will be better off.

“It also helps that Waitomo will be opening a self-service station in Kaiwharawhara early next year and Gull also says it will be opening at least two stations in the greater Wellington area soon.

“A lack of competition has been cited as one of the reasons Wellington fuel prices are higher than in Levin, which is less than 100km up the road.”

This week, a litre of 91-octane costs around $2.40 in Wellington but just $2.14 in Levin.

The price difference has been put down to what has been called “the Gull effect”, where cut-price retailers help force down local fuel prices.

Levin is the southern-most centre in the North Island where both Gull and Allied Petroleum have stations competing against BP, Caltex and Z service stations.

“Wellingtonians have rightly seen it as an injustice that despite being a major centre, they have been paying a lot more for fuel than people in Auckland, Hamilton, Tauranga and Napier,” the Mayor says.

“We want to make sure those complaints are a thing of the past. Higher fuel prices disproportionately affect those less well off in our society and I believe next year Wellington will be enjoying lower fuel prices.”

Councillor Simon Marsh, who holds the Economic Development Portfolios, says the price of fuel affects a huge number of businesses in Wellington.

“The way the price has been rising over the past year it is playing a bigger part in businesses’ decision-making.

“The cost of doing business for the plumber, electrician, manufacturer and public transport are all more expensive in Wellington because of fuel prices being higher in the capital.”