Ricochet News

Blame the Rand: Petrol price to drop by only 18c/litre next week

Blame the Rand: Petrol price to drop by only 18c/litre next week

The Central Energy Fund (CEF), on behalf of the Department of Energy, on Friday said that the price of 93 and 95 grade petrol would drop by 18 cents a litre on Wednesday next week.

The wholesale price of diesel .05% Sulphur is set to drop by 48 cents per litre and diesel .0005% Sulphur by 49 cents a litre, it said. Illuminating Paraffin's wholesale price will drop by 47 cents a litre.

The maximum retail price of LPGAS will decrease  by 9 cents per kilogram.

The CEF noted that; "In line with the Self-Adjusting Slate Levy Mechanism Rules, the Slate levy on petrol and diesel will remain at 0.00 c/l with effect from 07 September 2016."

Blame the Rand

This week, Automobile Association (AA) said renewed oil price strength, and a turnaround in the rand/US dollar exchange rate, may have stop to the substantial petrol price drops for September as suggested by its mid-August data.

“International petroleum prices have put in a surprising rally since the middle of the month,” the AA said.

The Association noted that a stronger rand would have cushioned this increase, but that this is no longer the case as the rand has somewhat weakened.

In mid-August, when the rand was stronger, the AA predicted that petrol would drop by up to 69 cents a litre, diesel by 94 cents a litre, and illuminating paraffin by around 92 cents a litre.

The association said it now expected petrol to fall by around 25 cents a litre, diesel by 54 cents, and illuminating paraffin also by 54 cents.

“The stronger oil price might have been kept in check more effectively had the rand not sagged so sharply against the dollar in the wake of developments around the Minister of Finance, Pravin Gordhan, being the subject of further investigation by the Hawks,” the AA said.