Significant drop in petrol price

Cape Town - The price of petrol will decrease by up to 69c a litre from next Wednesday, while the price of diesel will drop by 60c, the Department of Energy announced on Saturday.

The strengthening of the rand against the US dollar was cited as the main reason for the decrease.

The petrol price relief follows a breather of 25c a litre in June after increasing 30c a litre in May.

The DoE said in a statement that the rand's appreciation against the US dollar shaved off 15.16c/l, 14.58c/l and 14.58c/l  of the basic fuels price on petrol, diesel and illuminating paraffin respectively.

The average rand / US dollar exchange rate for the period under review - 2 June to 29 June 2017 - was R12.8756/$ compared with R13.2587 during the previous period.

The Automobile Association said earlier this week that the rand remained firm over the past month, apart from a brief reversal caused by the Public Protector's controversial comments on the role of the Reserve Bank.

At the same time, international petroleum prices maintained their downward trajectory. "This adds up to a pleasing drop in the fuel price which will be a patch of good news for many in the current economic conditions."

The price of 93 ULP & LRP petrol will decrease by 69c/l, 95 ULP & LRP by 68c/l, both grades of diesel by 60c, illuminating paraffin (wholesale) by 57/l and illuminating paraffin (SMNRP) by 76c/l.

The maximum retail price for LPGAS will decrease by 91c/kg.

The AA said the drop in paraffin prices is particularly beneficial to citizens who rely on this fuel for lighting, cooking, and especially heating, in the winter months. It however warns that even medium-term predictions of the fuel price remain difficult in the current environment of political instability and weak economic conditions.

"We advise all fuel users to create space in their budgets for price increases if the picture should deteriorate further."

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