Gordhan feud hits motorists

ANC tensions over the Treasury are hitting motorists, with the fuel price drop muted because of the power struggle.

In a statement, the Central Energy Fund (CEF) said the price of petrol was set to drop by 18 cents and diesel would drop by 48 cents from midnight tomorrow.

The CEF said the price drop was due to the strengthening of the rand against the US dollar.

However, Debt Rescue argued the drop in fuel could have been bigger.

Economist Dawie Roodt of the Efficient Group said the fuel price should have dropped by as much as 90 cents a litre for diesel and 60 cents for a litre of petrol, but: “Thanks to the rapid decline of the rand following the announcement by specialist police unit, the Hawks, that Gordhan had to report to them to give a statement, it has been downhill for the fuel price and the currency.”

Chief executive of Debt Rescue, Neil Roets, agreed with Bank of America’s wealth management company, Merrill Lynch, that the rand would hit R16 to the dollar by the end of the year.

He said if the rand dipped any lower it would have a negative effect on consumers.

“Even though the drop in the fuel price is smaller than expected, consumers should use the opportunity to reduce their debt load,” said Roets.

He noted that further belt tightening was hard to do.