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Infometrics principal economist Brad Olsen says there are worries that petrol prices will remain “at a more elevated level, given the conflict coming out of the Middle East”. (file image)
Photo: RNZ / Dan Cook
The conflict in Israel and Gaza may keep New Zealand’s petrol prices high, an economics analyst says.
Oil prices jumped by more than $3 a barrel overnight due to concerns the conflict would disrupt output from the Middle East.
Infometrics principal economist Brad Olsen said that was not a massive spike, but it would put more pressure on the price of petrol.
“We’re not expecting a particularly big shift at the pump, but certainly a lot of underlying pressure that means we are likely to see fuel prices drop back a lot and there’s certainly a risk that fuel prices could advance further and remain well above that $3 mark.”
There was a fall last week in international crude oil prices. “But some of the increases so far, because of the conflict in Israel, have since reversed out those losses,” Olsen said.
Olsen said there were worries that petrol prices would remain at “a more elevated level, given the conflict coming out of the Middle East”.
A prolonged conflict or other countries getting involved could add to those concerns, he said.
Petrol was an important cost for a lot of households, he said.
“The cost of living remains a key concern for a lot of New Zealanders.”
Monitoring by the Ministry of Business, Innovation and Employment suggested 91 petrol was nearly $3.17 at the end of September.
“That’s a lot of money that households are having to pay at a time when everything else remains quite expensive,” Olsen said.
Importing fuel with a weaker New Zealand dollar meant there were even further cost pressures coming forward, he said.
While that was unlikely to cause huge jumps in petrol prices, he said what was concerning was that “there’s not a lot of release on the horizon from those higher petrol costs.”
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