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Speaker 1: Good news on the way for motorists, which, let's face it,

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Speaker 1: that's most of us, especially if you're listening driving home

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Speaker 1: right now. Our petrol prices are expected to fall in

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Speaker 1: the coming days as oil slumps and the key WE

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Speaker 1: dollar stabilizes. Limb Dan's, the Herald's business editor, at largely

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Speaker 1: good evening, Good Ryan, some good news for a change

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Speaker 1: for us.

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Speaker 2: Yeah, and I like to write these things in a

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Speaker 2: way that makes it clear that they really should be falling,

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Speaker 2: and we should expect to see them fall the next

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Speaker 2: few days. So let's hope they do. It's a combination

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Speaker 2: of well, the main thing is that so the oil

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Speaker 2: price has fall into the lowest in three years, which

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Speaker 2: is quite a big slump in the past few weeks.

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Speaker 2: Actually you might not know that. Notice that at the

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Speaker 2: pump as much. You know, so our dollar has come

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Speaker 2: off a lot in the past say six weeks or

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Speaker 2: eight weeks or so, and that you know, oil has

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Speaker 2: traded in US dollars, So that affects the input price

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Speaker 2: for New Zealand, and that's part of the equation. But yeah,

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Speaker 2: with that, you know, brint crude slumping below US seventy

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Speaker 2: dollars a barrel you would, and then a dollar is

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Speaker 2: actually stabilized and gone up a little bit in the

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Speaker 2: past few days, it really should equate to some lower prices,

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Speaker 2: I would hope.

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Speaker 1: Well I've got I've sold this to everyone.

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Speaker 2: Yeah, yeah, well that's right. Well, we are dependent on

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Speaker 2: these big petrol companies that you know, they look, they

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Speaker 2: tell us, they pass it on pretty pretty well, and

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Speaker 2: Commerce Commission probably believes them.

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Speaker 1: So we've got a couple of things at play, right.

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Speaker 1: You mentioned we've got the exchange rate that's stabilizing, but

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Speaker 1: then we've also got a boost in production from opet countries,

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Speaker 1: and at the same time we've got growth not being

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Speaker 1: that great.

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Speaker 2: Yeah. So so, I mean Donald Trump came in promising

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Speaker 2: to bring down the price of oil. This isn't quite

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Speaker 2: the reasons that he would have wanted, but one of

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Speaker 2: the reasons is that when global growth looks like it's

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Speaker 2: going in the wrong direction, traders tend to sell off

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Speaker 2: oil because we're just not going to if the economy

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Speaker 2: isn't big, there isn't as much action in the economy,

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Speaker 2: you're not going to see as much use of petrol

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Speaker 2: basically motor you know, And so that's that's happened, and

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Speaker 2: so the tariff thing is weighing on the global growth story,

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Speaker 2: and so the investors are looking forward and going well,

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Speaker 2: they're not seeing so much oil consumption or fuel consumption.

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Speaker 2: And then OPEK, who is the organization that's sort of

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Speaker 2: dominated by the Saudi's Opek, plus it's got Russia in it.

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Speaker 2: They have after a couple of years of cutting back

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Speaker 2: on production, have This is sourced from Reuters, but that

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Speaker 2: Reuters says has got They've got three sources saying that

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Speaker 2: OPEK currently plans to boost production. So that means more

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Speaker 2: supply coming on less demand. And so the oil price

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Speaker 2: is slumped in the past few days. So some of

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Speaker 2: those reasons are not fantastic if you're thinking about global

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Speaker 2: growth and the fact that we want our you know,

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Speaker 2: exports booming and helping the recovery in New Zealand. But

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Speaker 2: you know, from an inflationary point of view, this is

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Speaker 2: the thing about economics, upsides and downsides. From inflationary point

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Speaker 2: of view, that's quite good. It means that less pressure

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Speaker 2: on domestic inflation, and obviously just quite good if you

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Speaker 2: kind of fill up for the weekend and going somewhere.

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Speaker 1: Certainly it's interesting because that monetary policy statement we had

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Speaker 1: through from the Reserve Bank, the most recent one, and

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Speaker 1: there they listed as one of the risks our exchange

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Speaker 1: rate to inflation, our exchange rate plus the potential for

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Speaker 1: you know, all of this stuff to happen overseas and

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Speaker 1: petrol prices to go up, and we would be doubly

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Speaker 1: kind of hat.

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Speaker 2: I guess they've got to look at that risk that

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Speaker 2: that was. I guess the dollar had been coming off

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Speaker 2: a lot at that point. It does seem to have stabilized.

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Speaker 2: The markets have turned a little bit against the US dollar,

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Speaker 2: and we've seen US bonds coming off a bit because

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Speaker 2: you know, they're genuinely concerned about what happens to what

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Speaker 2: Trump has called a bit of disturbance in the economy

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Speaker 2: that are around tariffs, and so that's a sort of

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Speaker 2: a headwind to US growth. And the US dollar has

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Speaker 2: come off a bit, especially against the European currency, but

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Speaker 2: that's benefited the New Zealand currency a bit. Look this

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Speaker 2: Wilburin right now, who's to say how long anything is

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Speaker 2: going to last. It could be the other way around

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Speaker 2: by the time I'm talking to you.

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Speaker 1: No next, which is what makes it so difficult if

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Speaker 1: you're a business like the automakers. Thank goodness they've been

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Speaker 1: given thirty day reprieve. But I was listening to an

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Speaker 1: exec from an automotive company in the US saying, how

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Speaker 1: do you plan when you know you're purchasing your stock,

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Speaker 1: your labor. When are these towff's going to be here

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Speaker 1: for one year, two year, three year, two minutes.

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Speaker 2: It's a huge amount of uncertainty. I mean, New Zealand's

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Speaker 2: facing it with agricultural exports. At the moment, I think

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Speaker 2: New Zealand's lucky. It's got great free trade agreements and

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Speaker 2: alternative markets, and there could be some you know, some

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Speaker 2: strange side effects. You know, if the US is US

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Speaker 2: beef's getting blocked in China, then it's probably good for

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Speaker 2: New Zealand. You know, it's very hard to see how

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Speaker 2: it lands. It is a big strange experiment right now.

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Speaker 2: And you know, let's hope that lends lends fairly well.

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Speaker 2: And want you know, New zealand economy is quite flexible,

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Speaker 2: and the dollar is a sort of a safety valve.

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Speaker 2: The fact that we have a floating dollar and we

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Speaker 2: can it's an economy that sort of self corrects around

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Speaker 2: some of this stuff, so that stuff's positive. If we

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Speaker 2: could just get a bit of growth going at the ground,

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Speaker 2: on the ground floor of the economy, they'd be all good.

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Speaker 1: In the meantime, Chip gas everybody enjoy Liam Dan the

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Speaker 1: New Zealand Heralds Business editor at LART.

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Speaker 2: For more from Heather Duplessy Allen Drive, listen live to

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Speaker 2: news talks. It'd be from four pm weekdays, or follow

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Speaker 2: the podcast on iHeartRadio.