Competition at the Pump - some thoughts

 Competition is the catchcry of modern governments when it comes to focusing on commodities and fuel is one commodity all economies try to make competitive.  It's a given that Fuel Prices are governed by supply and demand.  Supply is determined for a country like New Zealand on what is available from the market (Crude Oil Prices) and the cost of buying and importing/shipping (The state  of the NZ Dollar compared to US Dollar, the international purchasing governance).  Now for quite some time the supply has mainly been governed by many events happening in the world and as such demand has dropped locally as fuel prices escalate.

 It would be fair to say volatility drives supply and greed is the outcome of local demand.  It's long been a held view fuel companies profit greatly from the consumer, solely based on the fact that competition at the pump is non-existent as margins are quite low.  So how do we fuel competition thereby driving up demand?

An interesting note at Z's website states that with lower Crude Oil Prices and a higher NZ Dollar against the US, Z can purchase more fuel for their dollar.  This is interesting thinking.  So keep fuel prices as they are with marginal fluctuations and buy more fuel.  But why would you do that?  Surely if you buy more fuel you stand to actually decrease prices noticeably thereby driving demand for your product and undercutting the opposition also thereby driving competition??

Currently (as at 10 April) 91 fuel stands at $2.11 a litre, down from highs of $2.19 that's an 8 cent drop.  In the corresponding period world Crude prices have dropped appreciably and the NZ Dollar is at an all time high against the US$.  So if this is the case and fuel companies are buying more fuel, why are we not seeing a price war at the pumps?  I'd say the Government has to step in here and give guidance for that to happen, as lower fuel prices also are represented in lower inflation and cost of living figures  not to mention a higher tax take as goods and services get cheaper and more demand in the marketplace surely?

Anyway, those are my thoughts.  Maybe if we had our own Oil Supply we'd be far better off as a country!!