PRICEY FARES: A marketing agency has declared Christchurch's taxis to be the most expensive in the world, with a trip from the airport costing $4.50 a kilometre.

Taxi firms will not lower fares despite petrol prices plunging to their lowest point in four years.

National petrol and diesel prices were cut another 2 cents a litre yesterday as the cost of fuel fell for the 20th time in a row.

A litre of 91-octane fell to 179.9c, while diesel dropped to 111.9c.

Petrol prices have fallen 42c since October.

Diesel prices have fallen 40c over the same period.

Taxi fares have increased in line with fuel rises but would not decrease, the New Zealand Taxi Federation said.

"The actual effect of this [petrol price] drop is not as dramatic as it may have been a few years ago," executive director Roger Heale said.

"The sudden and dramatic drop in fuel prices is very welcome but it comes on the back of a number of years of steady increases."

For many operators, petrol was no longer a big contributor to operating costs, he said.

"Our members have invested very heavily in new technologies, such as hybrid vehicles, which dramatically reduce the amount of petrol consumed."

Consumer NZ chief executive Sue Chetwin did not accept that view.

Fuel prices should be lower and taxis should try hard to lower their fares, she said.

Taxi operators were getting a "wake up call" from new entrants to the market like Uber and should use lower fuel prices as an opportunity to compete.

"Taxi operators should be looking at lowering their prices, especially when they put them up because of higher fuel costs," Chetwin said.

"It's been very easy until now for the largest taxi company to charge quite high fares.

"I don't think that will be able to continue."

In July last year, marketing agency Digital Hothouse declared Christchurch's taxis to be the most expensive in the world.

A trip from the airport cost $4.50 a kilometre.

Wellington and Auckland were not much cheaper.

Gold Band taxis, one of Christchurch's largest operators, said it would not lower fares because of petrol prices.

It had been absorbing costs imposed on it for years, which were so severe it put some companies out of business.

"The fuel component of our pricing constitutes an approximate average of only 1 per cent of the fare per km that we charge our customers," manager Peter Lawry said.

Its fleet totals nearly 200 vehicles.

Legislation forcing taxi operators to adopt certain measures had operators on the back foot, he said.

"Taxi companies were required by law to provide 24/7 call centres and road coverage, substantially increasing the running costs of all taxi companies.

"These cost increases saw many taxi companies go out of business."

Smaller operators did not have the luxury of investing in hybrid vehicles, Lawry said.