We do the maths on how petrol prices are calculated and show that one element is rising fast, masked by the falling crude oil cost

Excellent article, conclusion: buy Z shares ?

Oil producers claim they aren't hurting too badly because they have hedged their production, who do you think is holding the other side of that hedge?  Zero sum game remember.

prices in the regions 10c + lower than the cities also.

Just filled up in levin for 89c/L diesel!! 30 mins south on kapiti coast was 107c, in welly 112c. 

Crazy price differences

Didn' t the ETS come into effect in 2010?

So it would not have been until 2012 when carbon prices crashed that the oil company margin took off. Which coincides with the Marsden Point refinery CCR project upgrade.

Cost of living is high here....

This is telling. Are you awake. Prices drop on World Market. But not here, in debt land.

http://www.movehub.com/blog/living-costs-world-map

What about 95/98 octane. Drove from ChCh to eastern BOP last week and the differential to 91 was anywhere from 6-21cents and mostly at the bigger end, total ripoff. Noted a servo selling at $1.60 in Rotorua on Tuesday, Rotorua has always been comparatively cheaper.

This article might be a little one sided.

Marsden Point were struggling with a low refining margin not very long ago.

Z have invested a bit of money into the operation and will want a return.

And we all know compliance costs only increase.

Lower oil prices are good for the lower income worker where their salaries need to go up.  This is like a tax cut to them or an extra $10 - $20 per week in the pocket.  As well as the oil service stations still overcharging compared to overseas, truck transport companies will be benefiting from the lower oil price and again probably not passing on the lower oil prices to its customers.

Additionally we should see cheaper flights too with lower fuel costs though some airlines are probably stuck in fixed contracts at $110 per barrell and will only see the benefits of lower oil price after March 2015.  Addtional to this when oil is cheap then the viability of fracking can also pull back on lower oil prices. 

Same old story, enabled by a naive New Zealand public and the inept commercial sense of government.

Workers and small  (and sometimes large) New Zealand owned businesses continue to be embattled and experience deteriorating conditions.  And are subject to market forces. 

And the large monopolies and cartels don't have to work too hard, they profit rather from control of their enviroment and market place.  Thus they cream our wealth away from us.  There is a reason why they pay insane prices to gain control industries who have pricing and position power.

My right wing view is that we need market forces.  But it's strange to observe that such are applied to workers and small businesses.  But the big industries in Energy, Government Services and Finance particularly are let free of this discipline. Let free to do what they want.  How does a supposedly right leaning national party let this happen.

Time for some trustbusting me thinks.

And congrulations David for doing this analysis.  One might think it an obvious one to do, but nobody in the media sits down and does the proper work.

Other media has covered it.  Mainly by filming a reporter standing outside a petrol station with a microphone. Hopeless.

So thanks.

The interesting problem is what high use industires will do with the with the windfall profits,

IATA suggest the windfall to the airline industry is globally around 20b$.

http://www.iata.org/publications/economics/fuel-monitor/Pages/price-analysis.aspx

Should industries repay debt? there are significant positive feedbacks in the economic cycle from this.

Z's cash flow available to shareholders in the 12 months up to latest  Sept 2014 results is negative after netting out working capital changes and CAPEX by my calculations - and while you can argue this is for growth - market share slipped - so it was in fact required to " maintain unit volumes and competitive position " as defined by Buffett as what is maintenance or business as usual CAPEX.

So they are desperate to get some $'s to pay the divvy in excess of $ 100 m last time round. I would maintain there has been very little in depth analysis in economic terms of their most recent result other than the usual cheerleaders.

That's why prices are being held up.

JB.  I decide then to hold up my income to previous high levels.  And I deserve it because  -aah - I decide I deserve it.

Accordingly I will inform my current customers that they will from now be paying much more and they will oblige.  Yeah right.

What you are explaining to me is that Z can keep up it's prices.  Which means they are a monopoly.  If they paid too much for that position.  Their problem in my view.

The problem with the mbie margins is they don't take into account the ever uncreasing range of discount offers available. Its pretty easy to never pay the price on the board.

If there is so much money to be made raise the cash and go for it like Gull has. Not that many barriers to entry.

Lots of barriers to entry actually Trader X.  Most of which are physical and natural.  It's petrol and requires ships and a multiple of other things.   It's not deciding to set up a cafe, which while hard enough is small bikkie by comparison.

All the same there have been a number who have tried, and some have succeeded.  Look at the history of Europa.  But eventually the monopoly will eliminate them, or buy them out.  To remove competition, and to regain control of our wallets.

Remember these guys don't make money from efficiency and for providing a service that matches the money they extract.   They make money because they have control.

You can do all the calculating you want and pontifcate as to the moral point of view of fuel pricing but face it the fuel companys and the crude producers and anyone who buys and sells any part of it can charge what ever they like.

Perhaps the government should invest in Gull so there will be increased competition. Perhaps the AA should invest in Gull too.