Motorists and other petrol users will soon rejoice as the Automobile Association (AA) releases the news that the petrol price is projected to fall by a whooping 59 cents per litre in March.
This idea if realized, will drastically reduce the petrol price from around R12.15 (93 LRP) and R12.43 (95 LRP) to around R11.56 and R11.84, respectively.
The AA said that ongoing oil price weakness has been bolstered by a strengthening in the Rand/US dollar exchange rate.
“The Rand has recouped some of its losses against the dollar and traded in a fairly narrow band since the end of January,” the AA said.
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“This is allowing South Africans to benefit from lower international petrol prices and provides some cushioning against any upward movement.”
Senior researcher at Solidarity Research Institute Paul Joubert said that the rand has, on average, regained its strength and had been trading at slightly stronger levels of around R16 to the dollar in February – from an average of about R16.35 in January.
“International dollar-prices of wholesale petrol have been trading significantly lower over the past 10 business days than in January, but diesel has been slightly more expensive, after falling sharply in January,” Joubert said.
“If the current over-recovery for petrol persists until 25 February, the retail price of petrol will fall by about 80 cents per litre,” he said.
Automobile Association pointed out that the current indicators show an encouraging decrease of around 56 and 59 cents a litre.
According to the Association, though the international price of diesel slightly went up during the first half of February, the exchange rate kick started some gains on diesel.
The price of oil continues to trade at around the $31 mark on Tuesday 16 January, while the rand has appreciated at R15,76 against the dollar in morning trade, from a nosedive to worst level of R17.995 in December.
Below are the current inland prices for petrol and diesel:
~93 LRP – R12.15
~95 LRP – R12.43
~Diesel 0.05% Sulphur – R9.43
~Diesel 0.005% Sulphur – R9.47
The finance minister is likely to announce at the end of the month, the annual change in the amount of the fuel levy and Road Accident Fund levy to be implemented on 6 April.