Petrol prices: What consumers can expect

Cape Town – Don’t expect another big petrol price drop or price hike until the year end, economists predict.

At least two economists say the petrol price will probably remain steady until the end of the year after falling by over 60 cents a litre.

The department of energy announced a drop in all grades of petrol and diesel prices from Wednesday 3 September.

Petrol 95 and 93 (ULP and LRP) is coming down by 67 cents a litre (c/l). The price of diesel with 0.05% sulphur will drop by 25.38 c/l and diesel with 50 ppm sulphur will decrease by 24.38 c/l.

Illuminating paraffin (SMNRP) will fall by 25.0 c/l and liquefied Petroleum Gas (LPG) by 108.0 cents/kilogram.

It is the third time this year that the petrol prices have decreased. So far, the petrol price increases are not far off from the petrol price decreases.

Petrol price figures

At the reef, since January, 93 octane (ULP and LRP) increased by R1.9 c/l, with the overall decline being R1.4 c/l. 95 octane increased by R1.13 c/l and fell by R1.4 c/l.

At the coast, since January, 93 octane increased by R1.5 c/l and dropped by R1.4 c/l, while 95 octane (ULP and LRP) increased by R1.9 c/l and fell by R1.4 c/l.

Economist Mike Schüssler, director at economists.co.za, told Fin24 that he does not anticipate another petrol price drop on the same scale to be announced again.

“I think a further petrol price decrease at this magnitude is unlikely. But I think a small increase or decrease, which will still be well below current petrol price levels, will at least help the pockets for another month or two.”

He said he still expects oil prices to rise towards the year end. “The northern hemisphere winter is on its way and they use a lot of oil during the winter”.

“I would think the September-October prices will be lower than the December–January prices. In February we often get price decreases again.”

However, he added that political tensions in Russia, Ukraine and in the Middle East can upset any predictions.

Efficient Group chief economist, Dawie Roodt, said he anticipates the petrol price to stay steady for the next couple of months.

“My suspicion is for petrol to remain mostly unchanged until the year end,” he told Fin24.

Cheer but no celebrations

While the petrol price drop has been welcomed, it will most likely only offer motorists a reprieve at the pumps.

SA National Consumer Union deputy chairperson Clif Johnston told Fin24 the decline is good news for consumers.

“This will result in a saving of some R25 to R35 per tankful. While not a fortune, it is money that can be put to good use elsewhere.

“The drop in fuel price it is unlikely to result in price reductions other than at the pumps, but it may well stall some price increases that were being considered”, he said.

Debt specialist Neil Roets agreed saying the price relief will likely not extend further than when motorists put petrol into their vehicles.

“Usually when the petrol price goes up, the cost of goods and services goes up in line with the price hike, but when the petrol price goes down, the cost of goods and services stays the same,” he told Fin24.

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