Petrol: price cut of 23c expected

2011-06-21 00:00

MOTORISTS can almost certainly look forward to a modest petrol price cut on July 6, 2011.

According to latest fuel price expectations, there is an over-recovery on the petrol price, which means consumers are paying too much for a fuel product on that day.

A senior economist with Econometrix, Tony Twine, told The Witness yesterday the petrol price is expected to drop about 23 cents a litre next month. However, the wholesale price of diesel could increase by about five cents a litre.

This follows petrol price hikes since October. The hikes lifted the price of 95 unleaded petrol on the coast to almost R10 a litre.

Twine said motorists could receive further petrol price cuts in coming months. He explained the anticipated price cut is a result of a stronger rand versus the U.S. dollar and stable crude oil prices.

“It’s really a function of the rand crude oil price coming down. When we moved into the northern hemisphere summer, we expected diesel prices to drop quickly and upward pressure on petrol prices, but the poor outlook for the developed economies brought the message to the crude oil market that the petrol price corrected upward too quickly and that diesel corrected downward too quickly.

“The crude oil price is trending downward now and there could be further petrol price cuts in the coming months if the speculative aspect of the oil price has been broken,” Twine explained.

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