Petrol price drop will be short-lived
Durban -The substantial decrease in fuel prices coming into effect tonight will be short-lived, with economists warning they may increase again in January.
Petrol comes down R1.85 a litre, diesel by about R1.40, and illuminating paraffin by R1.28.
It is the third time fuel prices have decreased this year.
Economist Professor Bonke Dumisa said they were happy with the significant decreases, but not surprised.
“I saw the rand value to the dollar moving from a R14.77 high to as low as R13.33. That meant we had been buying our crude oil cheaply. I also witnessed crude oil prices moving down to as low as $58 dollars a barrel. This combo was enough to see that fuel prices would go down,” Dumisa said.
He said, however, that the crude oil price rose this month. If this trend continued, the rand would not get stronger in the short term and fuel prices would increase next month.
SA National Consumer Union (Sancu) spokesperson Dr Clif Johnston said Sancu did not expect the price of goods and services to decrease much, if at all.
“Should the lowered fuel price be sustained over a number of months, the impact may eventually work its way into prices through market forces,” Johnston said. “Unfortunately business memories about price decreases are short, so if the fuel price increases again significantly, it is likely to result in further increases.”
He said the biggest impact would be on those driving to holiday destinations who should enjoy reductions of between R50 and R100 a full tank.
People Against Petrol and Paraffin Price Increases (Papppi) said the price decreases should match the increases.
“It should at least go down by R5,” said Bishop Bheki Ngcobo, Papppi’s deputy chairperson. “The government should have done better.”