BP email puts company in tricky situation - Automobile Association

Morning Talk 01/05/2018

Fuel giant BP has responded to criticism it is pricing people out of buying petrol after a 2017 internal email emerged showing the company raised prices around Ōtaki to stem losses.

Prices in Ōtaki were up to 20 cents a litre more expensive than in nearby Levin at the time.

The email also outlined hope that competitors would follow suit.

AA PetrolWatch spokesperson Mark Stockdale said BP has put itself in a tricky situation.

"Motorists are suspicious about fuel prices and how companies set fuel prices. This is just another example of the murkiness that is associated with the setting of fuel prices," he told Mark Sainsbury.

They're trying to match low cost discount brands like Gull

"The reason [BP is] losing money is in part because the price they're setting isn't viable because they're trying to match low cost discount brands like Gull."

In the email, BP pricing manager Suzanne Lucas wrote, "Rather than just reducing the price in Ōtaki we will be looking to increase the price at Paraparaumu & Kāpiti and also Levin," "We have already increased all three sites mentioned by 5cpl [cents per litre] and have found that the Z [Energy station] in Paraparaumu has already matched our pricing.

"Over the next couple of weeks we will continue to try a number of tactics in the hope of reducing the pricing gap between Ōtaki and its surrounding regions."

BP later justified its decision to alter the prices in an issued statement.

"Petrol prices in New Zealand are highly competitive and we adjust our prices in response to local competition, particularly in instances where discounting has become unsustainable, which is what occurred in the lower North Island last year," the statement said.

"Because the New Zealand fuel market is already highly competitive we actively manage our prices on a daily basis to remain competitive, as well as provide the best possible customer service offering."

But National's Energy spokesperson Jonathan Young said it was a surprising revelation.

"We want a competitive market where companies in order to lift clientele and attract customers would reduce their prices."

Energy Minister Megan Woods has been approached for comment.

Listen the full interview with Mark Stockdale above.

Morning Talk with Mark Sainsbury, 9am - 12pm Weekdays and streaming live on 'rova' channel 9 - available on Android and iPhone.