Cheaper fuel has been good news for busy trucking firms during Covid-19 restrictions
Posted: 28-Apr-2020 |
The head of New Zealand's Road Transport Forum says trucking firms are starting to see the benefit of a drop in fuel prices.
Global oil prices have dropped to record low levels, triggered by the Covid-19 lockdown and corresponding lack of travel.
In a report by RNZ, Road Transport Forum's Nick Leggett said consumers should start to see a corresponding drop in the cost of goods as freight companies started paying less at the pump.
"Parts of our industry are benefiting from some reduction in the cost of diesel, which is often passed back to customers."
But he warned that it sat alongside much wider challenges for the country.
"We've got significant challenges as a country, and if you look at a recessionary period, car usage and fuel consumption tends to drop anyway because there are fewer people working and fewer needing to use their cars."
The RNL editorial piece goes on to add that the head of an Auckland-based trucking firm, said that movement of freight, including food, had remained high throughout the Level 4 lockdown.
Chris Carr, the director of Carr and Haslam, said everything that was considered essential has been moving, including large numbers of shipping containers to and from ports.
He said fuel prices had started to fall even before the Covid crisis began ramping up, but the full effect of the current record slump in global oil prices was yet to filter through, as significant amounts of fuel purchased at higher rates was still in reserve.
"My feeling is that all our fuel tanks, all our holdings right through from the refinery to the individual oil companies' tanks are all quite full so none of that low-price stock has come through to New Zealanders," Carr said.
A month ago, Refining NZ cut processing rates at Marsden Point to match a sharp drop in fuel demand.
The plant, which produced about 75 per cent of the country's petrol, diesel and jet fuel, halted all non-critical work.
Carr said it might be some time before New Zealand road users saw the true effects of ultra low fuel prices. Leggett predicted the fuel price trend was likely to remain for the next year to 18 months.
The Government relaxed rules on essential freight a week ago, and allowed all road freight to travel.