Petrol price could increase in an instant

A MASSIVE fuel price decrease came into effect last night, but experts have thrown caution to the wind warning that higher oil prices internationally can be ignited “literally” overnight.

The Automobile Association’s Layton Beard said although international oil prices have declined, the Rand/Dollar exchange rate also plays a pivotal role.

“We are seeing that the petrol is decreasing because of the cheaper oil prices. We don’t also foresee that government increase the fuel levies because that will impact negatively on the price on petrol. Other factors at play is also the economy and the exchange rate between South Africa and especially the United States,” he said.

Beard said it looks like the prices are set to drop further going into the new year.

“The data shows that the prices are dropping, but we cannot make any final utterances, because in the oil industry, everything can change dramatically at any time,” Beard said.

Cape Chamber of Commerce and Industry president Janine Myburgh welcomed the significant drop in the price of both diesel and petrol.

She said it is a festive season bonus for hard-pressed consumers.

“It will make a big difference to the holiday season, and we could see a boost in internal tourism,” she said.

Myburgh said fluctuations in fuel prices were wild and made planning difficult for business.

“I understand that the reasons were that the exchange rate and the oil price both moved in our favour at the same time, but we need to find ways to stabilise the prices.

“I know that these are factors beyond our control, but we must bear them in mind in the fuel price review. The priority has to be to get our economy performing again to remove most of the exchange control variations,” she said.

“We know that OPEC and the Russians have already agreed to reduce their oil exports, so we will soon see prices normalise, hopefully at prices below those we saw in September, October and November,” Myburgh added.