Motorists can expect a fuel price drop on Wednesday, the first in six months according to the Department of Energy. Picture: Motshwari Mofokeng/ African News Agency (ANA)

Cape Town - Motorists can expect a fuel price drop on Wednesday, the first in six months according to the Department of Energy. 

“On July 3, the price of 93 ULP petrol will drop by 96 cents a litre, while 95 ULP will cost 95 cents less a litre. 

“Diesel (0.05 percent sulphur) will decrease by 74.78 cents a litre and Diesel (0.005 percent sulphur) will cost 75.78 cents a litre less. 

“The price of paraffin will be reduced by 57 cents a litre.”

The fuel price drop comes against a background of lower international oil prices throughout June. The Automobile Association (AA) said: “June was the weakest month for oil in the last quarter, with crude briefly slipping below $60 (R845) to the barrel at mid-month.”

Economist Dawie Roodt said on Sunday: “I sense some relaxation in the markets. In fact, I would have expected more of a drop in the fuel price, considering recent factors, such as the rand that has recently done quite well on the market. 

“This as well as President Donald Trump’s recent last-minute pull back from military strikes on Iran and the fact that this weekend the US and China agreed to resume trade talks. 

“I predict that in fact the next move after Wednesday’s drop may be an even further drop.”

The AA said: “Although the rand re-strengthened against the dollar towards month end, the exchange rate average for the month is negative by about 11 cents, meaning fuel users missed out on an even bigger drop. 

“Looking forward, the prime driver of fuel price movements for the third quarter of 2019 is likely to be the oil price.” 

Retreating oil prices have painted a rosier picture for South African fuel users than has been the case for much of 2019. 

This is according to the unaudited mid-month fuel price data released by the Central Energy Fund, which in mid-June said: “At this stage of the month, we are predicting a decrease of 91 cents a litre to the petrol price, 70 cents to the diesel price, and 62 cents to illuminating paraffin.”

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Cape Argus