Here in New Zealand, petrol is back in the news again as the price decreases over the last few months come to an end and pump prices tick back up sharply. We've been enjoying the cheaper fuel for the last few months. But we are at the mercy of the volatility of the dollar and the crude oil prices... sort of.
As prices were dropping, were we really getting a better deal? We all liked the prices going down, so maybe we wouldn't notice that actually we were being taken for more?
Here is the thing: between July 4 2014 and January 9 2015, the Importer Margin on regular petrol increased by 42%. By the start of January they were making almost half as much again per litre as in July 2014. This was during the period when prices at the pump were falling. Were the savings from the crude prices being passed onto the motorist? A portion was, but there was room for at least 10c more to come off the price before importers were at the July 2014 point.
But that wasn't a low point for them. Since mid 2009 the importer margin has been steadily increasing. In the mid 2000s it hovered around 12c or 13c. Since mid 2009, the importers have slowly inched the margins up, disguised among the many small pump price fluctuations.
My prediction, based on a 3rd order polynomial best fit function, is that Importer Margins will consistently exceed 45c by April 2016, unless more people come to realise what is happening and a pricing behaviour change is made.