Rand, oil price eating into fuel cost relief
Current data showing that September's fuel price decrease is likely to be smaller than originally hoped.
|||Johannesburg - While the good news is that South African motorists can still look forward to more fuel price relief at the beginning of September, the price decrease is likely to be somewhat smaller than had been anticipated earlier in the month.
On August 12 the average over-recovery was running at 69 cents a litre for petrol and between 93 and 94 c/l for diesel, according to the Central Energy Fund.
However the latest data at the time of writing, counting oil price and currency movements up to Monday (August 22), showed an over-recovery of just 44 cents a litre for petrol, 69 c/l for low-sulphur diesel and 70 c/l for 500ppm diesel. This would theoretically see the price of 95 Unleaded reduced to R11.91 in Gauteng and R11.43 at the coast, while low-sulphur diesel would now cost R10.27 inland and R9.89 at the coast.
This, of course, would depend on the rand and oil prices remaining stable between now and the end of August.
Both have see-sawed to some degree during the month so far. After starting August at R13.79, the rand hit a 10-month high of R13.27 to the US dollar on August 16, but has since retreated. The local currency hit R13.61 to the dollar on Monday (August 22), but by Tuesday midday was trading at R13.52.
The oil price has shown a general upwards trend during the month. Brent crude was trading at just below $43 a barrel at the beginning of August, but peaked at over $50 on August 18, before recovering to $48.82 (currently).
If the current trajectories persist, we could possibly be looking at a decrease of more than 44 cents, however.
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