On Thursday last week, the price for 95 octane petrol was over-recovered by 156 cents a litre for the month beginning on November 2. Over- recovery on the prices for 93 octane petrol (153 cents) and diesel (96 cents) also indicates a possible very large cut in fuel prices in early December.
The sharp decrease in the oil price to levels lower than $70 a barrel and the stronger R/$ exchange rate had led to the high under-recovery.
The strong appreciation of the rand to levels close to R14 to the greenback on Friday will contribute even more to a further under-recovery over the next two weeks.
It remains to be seen whether the Central Energy Fund will give the full deduction through to the consumer or keep an amount back to boost the so-called slate levy. The slate levy can be seen as a fund to stabilise fuel prices.