Christchurch motorists are enjoying the cheapest petrol in the country for the first time in years as new discount stations arrive in the city.

Last week, no-frills chain Gull launched in Christchurch with a new outlet on Stanmore Rd, Richmond.

This followed fellow discounter Waitomo opening a station in Ferry Rd in Woolston last month, its second in the city after opening its first on Fitzgerald Ave in December.

Both brands have a large network of stations in the North Island, where they have been driving price competition.

This is up to 10 cents cheaper than Auckland and Wellington, or $5 less to fill an average 50-litre tank.

A few outlets had diesel for under 99 cents.

Filling her car at NPD on Stanmore Rd on Friday, Anita Johnson from Invercargill said the prices were “great” and better than in her home city.

In Auckland and Wellington, what has become known as the “Gull effect” has kept prices down near discount outlets since the brand launched 20 years ago.

Mark Stockdale, petrol price spokesperson for the AA, said Christchurch now had the “sharpest prices” in the country, after years of South Islanders subsidising cost-cutting in the North Island.

He said price competition in the south started when South Island no-frills brand NPD began dropping prices ahead of Gull and Waitomo’s arrival from the North Island.

“This is what competition looks like. It’s been the case that the prices in the South Island have been higher for years, and now that’s changed,” he said.

Typically, low-frills brands competed amongst themselves, and full-service brands would only lower prices if they were losing sales to a discounter, Stockdale said.

Cross-subsidisation meant South Island motorists pumping the big brands have been helping fund discounts for North Islanders, he said.

After topping $2 a litre in January this year, prices in the city fell during the Covid lockdown to as little as $1.70, then began creeping back up over winter.

According to fuel price app Gaspy this week, motorists could fill up with regular 91 petrol for $1.74 a litre at the new Gull, Allied on Wainoni Rd, NPD on Stanmore Rd, and Pak’n Save at Wainoni and Moorhouse Ave.

A batch of other stations discount stations including Waitomo were charging $1.79 a litre, with most of the major brands wanting $1.80 to $1.90.

In both Auckland and Wellington the big discounters are charging between $1.85 and $1.88, with the big brands charging up to $2.12 in Auckland and $2.05 in Wellington.

Gull is now owned by Caltex Australia, while NPD is privately owned by a Nelson family and Waitomo is owned by a King Country family buying wholesale fuel from Mobil.

Christchurch’s new Gull is on the site of an old g.a.s. station. The chain is planning a second in a former BP station near Te Waka Unua School on Ferry Rd.

Stockdale said the no-frills brands keep prices down by cutting overheads. This means no or few staff, fewer facilities at stations, and smaller sites where land is cheaper.

”It’s giving South Island motorists a choice that North Islanders have had for a decade – you can go for the cheapest fuel, or the full- service station where you can stop off and get your refreshments as well.”

Extracted in full from: https://www.stuff.co.nz/business/122719149/christchurch-petrol-becomes-nzs-cheapest-as-discounters-trigger-pump-price-war

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