Crude Oil Prices
Crude oil is refined to produce petrol and diesel. We can only produce 15% of our own crude oil requirements. We therefore need to import crude oil to be refined at Marsden Point Oil Refinery into petrol and diesel. Crude oil is traded in US dollars on a global market. OPEC (Organisation of Petroleum Exporting Countries) controls much of the world’s production of crude oil. Political instability in the Middle East has a direct impact on product supply and pricing into the international market. For the last two years OPEC has reduced the production of oil to boost slumped prices. It's a simple case of supply and demand. If supply is limited the price is pushed higher. If the refineries have to pay more for crude oil the cost of the refined product will also increase. Import parity prices for refined products
Because we cannot produce all of our fuel needs at Marsden Point, we import approximately 35% of petrol, 20% of our diesel and 30% of our jet fuel from Australia. These are referred to as refined products and their wholesale price is determined according to world or import parity pricing. This price fluctuates based on global supply and demand and is quoted daily from Singapore. Import parity pricing is always quoted in $US and it affects the price of both imported and local refined product. $US/$NZ exchange rate
As crude oil and imported fuel are traded in US dollars, any movement in the $US/$NZ exchange rate has a significant impact on the pump prices in NZ.
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