Some relief at last
Lihle Z Mtshali
Lihle Z Mtshali
All indications are that motorists will be paying less for their petrol next month and the likelihood gets better every day, say economists.
After being battered with increases in the petrol price for almost a year, economists say government's set price is likely to be cut by as much as 30 cents a litre next month.
The last time we enjoyed a petrol price cut was in September last year, when government cut the price by 10 cents.
Since then, petrol has gone up by a cumulative R3,72 a litre inland, from R6,87 a litre in October last year, to R10,50.
Russell Lamberti, economist strategist from Econometrix, said yesterday that because the rand had strengthened against the dollar and the oil price had dropped to about $125 a barrel, a 30 cents per litre drop in the petrol price could be on the cards next month.
"When you take those factors into account, you will see that motorists are paying more for petrol than what it is costing suppliers to buy the crude oil, refine it and then sell on to consumers," said Lamberti.
Government announces changes in the petrol price on the last Friday of every month, so there are fears that it might be too soon to be speaking of cuts, but Lamberti said there were only a few days left before the end of the month, and suppliers had been experiencing an over-recovery in the petrol price in July.
Mike Schussler, an economist at T-Sec, said government was likely to cut the petrol price by between 20 cents and 30 cents a litre.
"The likelihood gets better every day when we watch the oil price dropping further and further," he said.
Diesel would get a lower cut, while illuminating paraffin would not drop, said Schussler.