Diesel prices may rise as Russia supply crunch bites - AA

The Automobile Association (AA) says fuel prices may be about as low as they will get for a while, with diesel at risk of rising because of a Russian export ban.

Petrol prices have fallen steadily in recent weeks after a ceasefire was announced between the US and Iran last month.

On Monday, Gaspy listed the average price of 91 petrol at $2.92 a litre, while diesel averaged $2.39.

AA spokesperson Terry Collins said Russia's decision to ban diesel exports last week was likely to put some upward pressure on local diesel prices, although he did not expect a big jump.

Russia is the world's second-largest exporter of diesel, but its production has been under pressure because of Ukrainian drone attacks on its refineries.

"Although Russian oil or diesel does not go into European or US markets, it has already had an impact," Collins said. "Mid-last week, we saw the price of a barrel of diesel - that's the refined price - jump to about US$154. That's about an 11 percent jump."

Collins said that after a welcome period of falling fuel prices, prices probably hit bottom in New Zealand last week as tensions renewed around the Strait of Hormuz.

He said Russia's supply crunch, peak summer demand in Europe and the risk of the US hurricane season were all likely to add upward pressure on prices.

"I thought we were just going to enter a golden period a week or two ago, where the economy was picking up, prices were going down and it was looking good for spring. That's come into a bit of uncertainty now because of the potential for these prices to go back up again and the inflationary pressure they have."

Oil prices open higher in Asian trade

Oil prices opened 4 percent higher on Monday, with Brent crude trading at US$79 a barrel. West Texas Intermediate was trading at US$74 a barrel.

The US and Iran continued to launch attacks on each other over the weekend, with traffic through the Strait of Hormuz grinding to a halt again.