Fuel: Big reduction in pump prices expected at the beginning of next month

2012-05-19 00:00

AFTER months of hefty petrol price increases that have threatened to destroy the finances of households, South African motorists can expect a sizeable cut in the price of petrol next month.

Although the price changes will only be announced in about two weeks, economists predict that the price of petrol could decline by as much as 56 cents a litre in the first week of June.

In addition, the wholesale price of diesel could be slashed by 20 cents a litre.

The chief economist of Econometrix, Dr Azar Jammine told Weekend Witness that the lower global crude oil price in May has been the main driver of the current trend.

“Although the rand was weaker against the U.S. dollar in recent weeks, almost getting to a low point it reached last year, it has not declined by as much as the oil price has declined. The price of oil has gone from its peak in March of $128 (R1 062) a barrel to about $108 a barrel,” explained Jammine.

He expects the price of crude oil to remain largely stable in the short term, with little risk of another spike.

Consumers have had to put up with crippling petrol price increases that have pushed the price from about R10,31 a litre at the beginning of this year to almost R12 a litre.

Fuel prices will be adjusted on June 6.

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