Short lived petrol price relief predicted

All grades of petrol will cost 51c a litre less from next Wednesday, the Department of Energy announced on Friday.
Diesel 0.05% sulphur and diesel 0.005% sulphur will decrease by 75.82c and 73.82c respectively, while liquefied petroleum gas (LPG) will decrease by 56.0c/kg, illuminating paraffin (wholesale) by 70c/l, and illuminating paraffin (SMNRP) by 93c/l, the department said in a statement on Friday.

All petroleum product prices will drop with effect from August 1 2015.

The department said the average international product prices of petrol, diesel and illuminating paraffin decreased during the period under review, while the rand on average weakened against the US dollar, compared to the previous period.

“The average rand/ dollar exchange rate for the period 26 June 2015 to 30 July 2015 was 12.4128 compared to 12.3196 during the previous period.

“The weakening of the rand against the US dollar increased the contribution to the Basic Fuels Price on petrol, diesel and illuminating paraffin by 4.87 c/l, 4.25 c/l and 4.19 c/l respectively.”

Debt Rescue CEO Neil Roets cautioned on Friday that the relief could be short-lived, taking into account that other economic indicators remain largely negative.

“A decrease may be of a very temporary nature as the rand is taking a hammering, having decreased in value against the dollar by more than 10% since the beginning of the year. This past week alone it has dropped by more than 1.5%,” said Roets.

“It is belt tightening time for the storm that might hit us later this year, as there is almost certainly going to be another interest rate hike. It is also a given that if the rand keeps trading at its current level, we are going to be looking at a substantial fuel price increase next month.”

Fin24