A leaked email from a BP manager exposes tactics fuel retailers use to increase prices at the pump in Otaki and eisewhere.
The Spinoff news service asks: ‘How can it be that petrol prices at the BP petrol station in Otaki are 20 cents per litre more expensive than the other BPs in the surrounding towns of Levin and Paraparaumu?
The leaked email from the petrol retailer lifted the lid on its regional price-setting tactics, and how it hikes prices and watches its competitor’s follow suit.
Expensive Otaki was sustaining losses. So what did BP do? The email says: “Rather than just reducing the price in Otaki we will be looking to increase the price at Paraparaumu & Kapiti and also Levin. We have already increased all three sites mentioned by 5cpl and have found that the Z in Paraparaumu has already matched our pricing.”
The Spinoff article by Rebecca Stevenson says the email mentioned above is ‘an embarrassing blip; petrol companies like to masquerade that New Zealand petrol prices are at the mercy of international movements and they’re an uncontrollable force.’
But, he adds, ‘it’s long been suspected regional markets were being utilised to cross-subsidise, meaning aggressive prices and losses due to competition in Auckland for example were being recouped in the regions with little competition, like Wellington.’