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| How are petrol prices determined? |
The price of petrol is
determined by several factors. These include competitive
activity, the cost of refined petrol and diesel on the world
market, the cost of shipping, the exchange rate between NZ$
and the US$ and Government taxes. The cost of crude oil also
has a large impact in driving prices over time.
Independent Challenge retailers determine their own retail
prices at the pump. All companies are purchasing oil in the
same market, so all are under similar margin pressure when
prices are increasing. Oil companies are working off very slim
margins in New Zealand. |
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| What is the octane rating? |
Octane is a measure of a
gasoline's ability to resist pre-ignition, commonly
known as 'knock'. Comparing performance in a test
engine against iso-octane and n-heptane identifies
an octane number. Iso-octane is good at controlling
knock and is given a scale value of 100. N-heptane is
very poor at controlling knock and is rated zero.
Octane requirements for a car are generally determined
by the design of the car and the driving history it has.
As a car is used more, the condition of the engine
changes and this can cause a need for a higher
octane. Many car manufactures design car engines so
that even when the engine changes, the car will still
run fine on 'regular' octane. However, some cars with
high compression engines, like sports cars or luxury
cars may need a higher octane. This is usually due to
the more serve designs of the engines or because deposits
that built up during the running of the car are greater
than expected. |
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| What legislative controls are
imposed on the operation of your business? |
| The petroleum wholesaling
and retailing market was deregulated in 1998, so
there are no specific price regulations in place.
There are requirements such as safety, environmental,
health and product specifications all of which Challenge
adequately meet in New Zealand.
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