Gasoline prices: Cuts in global oil production expected to hit household pockets

Pain in the pump is expected to worsen in the coming months as gasoline companies report higher prices due to cuts in global oil production and sanctions on Russian offshore oil tankers.

This is not welcome news for households already snowing with rising costs of living and rising interest rates.

Those who fill up at the Auckland suburb of Mt. Albert petrol station know that a liter counts.

Alma Urbiztondo said her family noticed rising prices for shelves and pumps.

“We sold one car, which is now the only car in the family. My sister decided to take public transport to cut some of the budget.”

George Baker said he spends $150 a week refueling his car, and higher prices will put more pressure on his budget.

“I have to work, so I’ll probably have to take something out of my budget. That’s how I get my money.”

Jennifer Martin said that if the price of gasoline rises, there will be less discretionary spending.

“I still drive to work, but I don’t drive to my family. One parent takes 45 minutes one way, another 45 minutes one way, so it takes much less time to get home. increase.”

OPEC, an organization of oil exporting countries, will cut oil production by 2 million barrels per day, or 2% of global demand. This is the most severe cut since the pandemic began.

Given that oil production is below target, analysts say the actual cuts are likely to be less.

Gull general manager Dave Boger said the supply shortage could be felt at the pump.

“The price of the product we are buying will go up. Unfortunately, we have to pass it on to our drivers. We will do everything we can to keep that from happening, but in the end there is only so much we can do.” ‘ he said. He said.

“It certainly goes down when fuel costs go up, but my gut feeling is people are going to the movies less often.”

The AA’s chief policy adviser, Terry Collins, said there are other headwinds hitting gasoline prices.

“In the coming months, it could get a little dire. In December, they are going to sanction seaborne oil shipments from Russia. That’s the impact on prices.”

The fuel excise tax will be reinstated at the end of January, adding 25 cents per liter to the cost.

“All of these factors will likely see us at the very high prices we have seen for some parts of this year.”

Collins said the impact of soaring fuel prices on people’s driving habits would be small, but that could change.

“If you don’t need to use your car for short trips in good weather, it’s best not to use it. Your car won’t reach its optimal operating temperature anyway. You’ll use more petrol and your car It might be nice to leave it in the garage and take a walk.”