Johannesburg - South Africans will breathe a sigh of relief this Wednesday as the price of petrol is poised to fall by 51c a litre, thanks to the recent decline in international oil prices, which offset ongoing weakness in the rand.
The price reduction is to come into effect on Wednesday, taking the price of 95 octane (ULP, Gauteng) to R13.26 per litre.
The price of diesel will drop by between 74c and 76c a litre.
“The petrol price decrease in August 2015 will reduce the monthly consumer inflation rate by 0.2 percentage points, which is meaningful,” said Kevin Lings, Stanlib chief economist.
“Encouragingly, the daily over recovery on the petrol price on July 30, 2015, was a massive 82c a litre. This means that at this stage it is entirely possible that the petrol will decline again in September 2015,” he added.
Even so, other cost pressures are still likely to push consumer inflation over 6 percent in early 2016, a prospect that the South African Reserve Bank cited as a catalyst for raising interest rates by 25 basis points in July.
Pressures from the cost of electricity, water, education, food and insurance, would weigh on consumer spending.
“Consequently, consumer spending is expected to slump further in the months ahead, aggravated by a further hike in interest rates,” said Lings.
BUSINESS REPORT