Petrol price set to drop from record highs
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SOME SLIGHT relief may be in sight for hard-pressed motorists with the price of petrol likely to move off record highs and drop by between 18 cents and 20 cents a litre.
The Central Energy Fund yesterday issued its mid-month basic fuel price update, which shows the price of petrol may not increase as much as was feared.
According to the update, petrol is likely to decrease by about 18c a litre for 95 unleaded.
A litre of 93 unleaded could decrease by 20c, though diesel is looking set for a smaller decrease, or even a slight increase, if current trends persist.
Currently, 95 unleaded petrol costs R17.62 in the coastal areas and R18.34 in the inland regions, where the slightly cheaper 93 unleaded petrol retails for R18.15.
The wholesale price of 50 ppm diesel is currently listed at R14.92 at the coast and R15.52 inland, but as these exclude retail margins, motorists will find themselves paying more than that at the forecourt.
Last week, the Automobile Association (AA) warned that fuel prices were set to increase at month end, due to strong oil prices and a flat rand/dollar exchange rate.
The AA said it had noted oil prices spiking above $75 (R1 294) a barrel in recent days, and the upward trend had been evident throughout the month of September.
“Brent Crude in particular has increased by $10 a barrel in less than a month, and the Mediterranean and Singapore prices used in South African fuel pricing are also on the advance,” it said.
“This trend could point towards substantial future fuel price increases.”
Until the government manages domestic policy more effectively, the rand will continue to expose South Africans to the full brunt of bullish oil prices, meaning South Africans are not getting fuel as cheaply as they could be.”
Consumer confidence has remained in negative territory during the third quarter and remained below the long-term average.
The SA Reserve Bank (SARB) is set to announce its next monetary policy decision on Thursday, but economists expect it to keep interest rates steady at 3.5 percent.
The SARB’s Monetary Policy Committee (MPC) noted at its last meeting in July that the central bank’s Quarterly Projection Model pointed to the need for a 25 basis points increase in lending rates during the fourth quarter of the year.
PricewaterhouseCoopers (PwC) chief economist Lullu Krugel said they expected the SARB to subsequently lower its projections for 2021-22 when the MPC meets again this month.
“This, in turn, could result in the QPM delaying the requisite for the first interest rate hike to January next year.
“PwC expects no change in interest rates this month and for the remainder of 2021, and that the start of monetary policy normalisation will only be seen in the first quarter of 2022.”