Big petrol price drop for August

Big petrol price drop for AugustBig petrol price drop for August.

The Central Energy Fund has released the petrol price data to take effect in August, showing a sizable drop in fuel prices across the board.

From 5 August 2015, 93 and 95 petrol will cost 51 cents less, while diesel will drop by 76 cents per litre.

According to the AA, the oil price has shown a gradual downward trend, and has continued to decline since the mid-July review of the fuel price picture.

The table below details the changes:

Fuel Increase/Decrease
93 Petrol -51 cents
95 Petrol -51 cents
Diesel 0.05% -76 cents
Diesel 0.005% -74 cents
Illuminating Paraffin -93 cents

Although the fuel price decrease will greatly help deeply indebted consumers, the relief might be only temporary, cautioned Debt Rescue CEO Neil Roets on Friday.

While he welcomed the expected fuel price drop, Roets said consumers should be mindful that other economic indicators remain largely negative and they should understand that this is not a windfall that should encourage spending.

“A decrease may be of a very temporary nature as the rand is taking a hammering, having decreased in value against the dollar by more than 10% since the beginning of the year. This past week alone it has dropped by more than 1.5%,” said Roets.

“It is belt tightening time for the storm that might hit us later this year, as there is almost certainly going to be another interest rate hike. It is also a given that if the rand keeps trading at its current level, we are going to be looking at a substantial fuel price increase next month.”

So far this year, the price of petrol went from R10.78/litre in January (for unleaded 93 at the coast) to R13.26 in July. The petrol price only decreased in February, and was unchanged in May from R12.35/litre in April.

Diesel impact

Regarding the expected diesel price drop, Roets pointed out that everything people consume is transported by trucks that guzzle vast amounts of diesel.

“If retailers play the game and pass on the reduced transportation costs, we could be looking at a reduction in the price of food and most other goods,” said Roets.

“It might even throw a lifeline to Eskom, which uses large amounts of diesel to keep its gas turbine generators going to help fill the shortfall of electricity in the grid.”

Deeply indebted

Consumers collectively owe about R1.6trn and more than half of all borrowers are three months or more in arrears with their bill payments.

Any move in fuel prices, to be announced later on Friday, will take effect next Wednesday.

Article Source:http://businesstech.co.za/

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