Experts forecast big fuel price drop

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IOL image petrol pump INDEPENDENT MEDIA File photo

Johannesburg - There is going to be relief for motorists next week as the petrol price looks set for its biggest decrease in over a year.

The chief economist at Efficient Group, Dawie Roodt, said he was predicting a “big drop” of between 60 cents and 70 cents a litre.

“The main reason is the international oil price came down,” he said.

However, the Department of Energy has yet to officially confirm whether there will be a petrol price drop.

Roodt said it was “tough” to predict whether the price would fluctuate again in the near future.

“I think the rand will continue to weaken and the oil price will continue to drop, that’s likely to neutralise each other,” he said.

He predicted there would be no significant change either way in the fuel price by the end of this year.

In a statement by the Automobile Association, it predicted the petrol price would drop by 56 cents a litre and 65 cents a litre while diesel and paraffin would decrease by 15 cents and 12 cents a litre respectively.

The association said this was based on unaudited data from a Central Energy Group study and could be one of the “largest drops in the fuel price in recent times”.

“Conditions look ripe for motorists to receive some much-needed relief at the pumps come the end of August,” the AA’s statement said.

Currently, motorists are paying R14.33 for 95-grade at the pumps inland and R13.92 at the coast.

This is just short of the record price of R14.39 and R13.98 respectively between April 2 and May 7 this year.

The last time there was a decrease in the petrol price around the same estimated drop expected next week, was in May last year when it went down by 73 cents a litre.

Motoring expert, Rob Handfield-Jones, explained that changes in the petrol price are determined by whether prices at the pump cover the cost of buying the fuel from suppliers.

He said the forthcoming drop means that the income at the pump was greater than the cost of buying the petrol over the past few months and this surplus was now being passed on to consumers.

Handfield-Jones predicted that 95-grade petrol would drop by 68 cents a litre and 62 cents a litre for 93-grade fuel. - The Star

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