petrol price likely to be pumped up
MOTORISTS should brace themselves for a possible petrol price hike at the beginning of next month.
Analysts said yesterday petrol prices could go up by between 30 and 40 cents a litre.
Econometrix market analyst Trevor Barsdorf said the price, which is set by the Department of Minerals and Energy, has been in an under-recovery position this month.
"Costs have been higher this month compared with last month and the under-recovery has been trending anywhere between 20cents a litre to 40cents a litre from about the 10th of this month.
"The department will have to recover those costs."
An under-recovery in the petrol price means that motorists are paying less for petrol and diesel than the actual cost of the fuel. The cost is determined by international oil prices as well as the rand-dollar exchange rate.
South Africa purchases oil in US dollars.
The price of petrol was cut by 21cents at the beginning of August to R7,96 a litre of unleaded 95 in Gauteng.
Barsdorf said consumers could expect a hike in September of about 40cents.
"Petrol prices are still 16percent lower than they were this time last year, but it will still put a dent in consumers' pockets," he said.
Jean Francois Mercier, chief economist at Citi SA, said: "Assuming that relative stability in the rand-dollar exchange rate and in oil prices continues, we could see an increase of between 30cents a litre and 35cents a litre for September."
He said the average under-recovery this month has been 41cents a litre up until Tuesday when it was 27cents a litre.
"There has been no major direction in global markets and over the next few weeks we do not expect to see markets move very much," Mercier said.