Motorists can expect 70c drop in petrol price
SOUTH African consumers and motorists can expect some relief from a petrol price cut of more than 70c/ l if the global oil price stays below $100 a barrel next week.
Economists expect a further price cut in June, which would put downward pressure on consumer inflation in the coming months.
At the current Brent crude oil price of $99.90 a barrel, and at R9.14/$, Econometrix economists expect the pump price to fall 70c/ l for 95 octane in Gauteng, 50.8c/ l for diesel and 58.9c/ l for paraffin.
A 70c/ l drop in the fuel price would also put downward pressure on the consumer inflation rate, Econometrix economist Laura Campbell said. “Overall, it would have a downward pressure of about 0.5% on inflation,” said Ms Campbell, who attributed the weaker international oil price to a fragile recovery in the US economy, as well as lower-than-expected Chinese gross domestic product growth.
The Department of Energy will make the monthly announcement on April 26, to take effect in the first week of next month. The final price will be determined by the global oil price and the rand/dollar exchange rate the previous day.
The price of Brent crude dropped to a year low of $98 a barrel yesterday, while the most actively traded oil futures contract, the Western Texas Intermediate, fell to a year low of $86.06 a barrel.
Brent crude has traded at an average $111.45 a barrel since the beginning of the year, down from an average $119 a barrel for January to mid-April last year.
A lower pump fuel price would generally be good for SA’s consumers as the fuel basket makes up 5.68% of the consumer price index.
“It looks very possible that we’ll have a massive decline in the petrol price next week,” Economists.co.za economist Mike Schussler said. He said motorists will save an average of R140 a month from next month.
Mr Schussler expects the global oil price to decline further in the next few months as the global economic recovery has been pedestrian at best. “There can be another fuel price cut again in June,” he said.