This is according to the Automobile Association’s head of public affairs Marius Luyt who was commenting on unaudited data released by the Central Energy Fund on the last day of last year.
Luyt said, “International petroleum prices have continued their steep drop, not even a gradual appreciation in the rand/US dollar exchange rate has been able to spoil the party, and across-the-board reductions of more than a rand per litre seem to be on the cards.”
He said the main reason for the drop is the demand and supply situation whereby the supply is more than the demand internationally.
Luyt said, “The supply is not coming down, the demand is getting lower and that forces the fuel prices to drop. In the South African situation, the rand/US dollar exchange rate also plays a major role, although the rand is weak against the dollar, but the rand does not drop at the same speed as the oil process internationally. The oil prices decrease at a higher speed as compared to rand/US dollar exchange.”
Luyt said the petrol will drop by up to 124 cents per litre, diesel by about 102 cents and illuminating paraffin by about106 cents.
He said, “This is the biggest decrease in a very long time. Not even in the last 10 years did it decrease to this low. Rand strengthening will be a rosy for the country.” Luyt added that motorists can also expect another decrease in February.
“This will depend on the rand/US dollar exchange rate, but we don’t foresee any increase anytime soon unless something extraordinary occurs.”
He said this means more money for motorists. Those who will be travelling home and to work after the holidays will have extra cash during the difficult times in January.
“It will have a positive impact on the consumer prices as well as the logistics industry. Prices will go down and we hope the decrease maintains itself for a long time as this can have a positive impact on the inflation rate. This can also have a positive impact on our economy as lower prices mean more to sell.”
