Statistics NZ's monthly price index shows petrol prices surged 33.6% and diesel 94.9% from February to April, with the Middle East conflict identified as the primary driver of what the IEA called historic supply disruption.
New Zealand's fuel prices have recorded one of their sharpest short-term increases on record, with petrol up 33.6 percent and diesel up 94.9 percent in just two months — February to April — according to Statistics NZ's monthly Selected Price Indexes (SPI).
The data, released Friday, showed that from March to April alone, petrol rose 12.6 percent and diesel jumped 36.6 percent. In the year to April, petrol was 30.1 percent higher and diesel was 91.3 percent higher. The numbers reflect the global oil supply disruption triggered by conflict in the Middle East — disruption the International Energy Agency described as among the most significant in the history of the global oil market.
Why fuel prices matter more than the headline number
Fuel is a foundational cost in the New Zealand economy. It directly affects the price of transporting goods — which feeds into grocery prices — and it directly affects household budgets for anyone who drives. Fuel price inflation also has an indirect effect: it raises costs for businesses that rely on logistics, and it adds to the cost of agricultural production, where farm diesel is a significant input.
The SPI series captures about 47 percent of the components of the quarterly Consumers Price Index. That means the fuel price surge in February, March, and April will flow substantially into the next CPI release, pushing the quarterly inflation figure higher. The RBNZ will be watching closely — persistent fuel-driven inflation is exactly the kind of shock that makes the OCR outlook less predictable.
Electricity and gas are also moving higher
Fuel is not the only energy cost under pressure. Electricity prices have been rising every month since December 2024, and the April data showed a further 2.4 percent monthly increase. Over the year to April, electricity prices were up 13.1 percent and gas prices were up 10.8 percent. For households already managing higher mortgage costs and grocery bills, this is a third simultaneous cost pressure.
The interaction between electricity and fuel prices matters because New Zealand's electricity generation is substantially hydropower. When dry conditions reduce hydro lake levels — as happened in 2025 — the link between international fuel prices and domestic electricity prices becomes more direct, as thermal generation sources are drawn on more heavily.
Airfares and food: the other SPI details
Domestic airfares rose 4.2 percent in April and international fares rose 6.2 percent, influenced by Easter, school holidays, and Anzac Day all falling in the same month. On an annual basis, domestic fares were still down 6.9 percent and international fares down 6.5 percent — aviation fuel costs have moderated from their 2025 peaks even as they remain elevated.
Food prices were flat month-on-month in April, which provides some respite. But all food groups showed increases over the year, with meat, poultry, and fish up 7.8 percent — driven by porterhouse and sirloin steak, beef mince, takeaway coffee, and white bread. This is consistent with the pattern of grocery inflation that has persisted since 2024.
What the outlook depends on
The central scenario for fuel prices — and therefore for New Zealand's near-term inflation — hinges on what happens in the Middle East. If the conflict is contained and supply lines stabilise, fuel prices could moderate from current levels, which would reduce the upward pressure on the SPI and eventually on CPI. If the conflict persists or escalates, the current price environment becomes the new baseline rather than a temporary spike.
For the RBNZ, the difference between those two scenarios is the difference between an OCR peak of around 3.5 percent and one closer to 4.5 percent. That in turn determines how high fixed mortgage rates go when borrowers come off their current terms.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.