Petrol prices drop under $3 a litre – but have they fallen quickly enough?

Author: NZ Herald,
Publish Date: Mon, 29 Jun 2026, 2:59pm

The average price of petrol has dipped under $3 for the first time in more than three months as a fragile ceasefire between the US and Iran holds.

According to Gaspy, the average price of unleaded 91 dropped to $2.99 a litre on Monday morning, the lowest price since March 16.

After surpassing $3 a litre, the Government introduced a fuel support package aimed at 143,000 low-to-middle income working families with dependent children, giving them an extra $50 per week through a boost to the in-work tax credit.

The added payment would last for one year or until the price of 91-octane petrol drops below $3 a litre for four consecutive weeks.

But while petrol has fallen from about $3.48 a litre in mid-April, the pace has been significantly slower compared with its upward trajectory when the Middle East conflict began.

The average cost for 91 sat about $2.49 at the beginning of the war, before jumping 14 cents a litre to $2.64 between March 6-9.

Three days later, petrol had increased a further 12 cents a litre to $2.76.

Meanwhile, in the space of eight days between March 19 and March 27, unleaded 91 soared 32 cents on average to $3.40.

However, that same 32-cents-a-litre fall to get to $2.99 today has taken more than a month.

Westpac chief economist Kelly Eckhold said it was reasonable to expect some further falls in petrol prices to go through in the next few weeks.

“It’s broadly lining up with the indicators we use for the refined fuel prices in Singapore,” he said.

“Probably the target that we think that price for the 91 would be heading towards is still in that $2.80 to $2.90 range, maybe a bit closer to $2.90.

“We will have to keep half an eye on the exchange rate though because that has fallen away.”

Eckhold said the New Zealand-US exchange rate had fallen 6% from just about 60c on February 27 to 56.40c today.

“That’s quite significant.

“The Kiwi-US exchange rate could easily head down towards 55 cents and if that happens then that will significantly mitigate against petrol prices falls.”

Eckhold added that not much oil has really started flowing out of the Middle East.

“We used to see 100 to 125 ships a day transit the [Strait of Hormuz] ... best day last week we got up to I think was 40.

“There’s quite a lot of water to flow under the bridge there.”

He said pre-war pricing for petrol was still “a far way away”.

“I think we do need to see a decent period we’ve you’ve got shipping flows at least as high as they were pre-war.”

The Commerce Commission recently put fuel retailers on notice, saying it expected to see decreases in global costs passed through to prices at the pump “in the same way the increases have been”.

“We’ve made this expectation clear to the fuel companies and will be continuing our weekly monitoring of prices so we can call out any behaviour that is cause for concern,” commissioner Bryan Chapple said.

The competition watchdog said it had been reasonable for businesses to adjust their prices in response to higher and more volatile global wholesale prices during the Middle East conflict.

“Now that we’re seeing some stability in the region, we expect this will lead to lower imported fuel costs and we want to see that reflected in the prices consumers are paying,” Chapple said.

The commission also said fuel surcharges and fuel adjustment factors (Fafs) must reflect only the additional fuel costs a business is facing.

The price of Brent crude – the international benchmark – sat around US$72 a barrel today, slightly above its pre-war price but well below the US$120 seen earlier in the conflict.