Petrol price drop predicted
Public purse could get fuller as world Brent crude oil value plummets to four-year low.
MOTORISTS could soon let out a sigh of relief when stopping to fuel up.
Economists are confident that a decline in the current petrol and diesel prices will bring a welcome relief by next month thanks to Brent crude oil prices sinking to a four-year low of around $85 per barrel – and the Rand remaining relatively stable at around R11/$.
Deputy Dean in the Faculty of Commerce Administration and Law at the University of Zululand (Unizul), Irsshad Kaseeram, believes petrol will be 10 to 15 cents per litre cheaper, while a more optimistic Paul Joubert, Solidarity Senior Economic Researcher, predicts a fall of 42 cents.
Meanwhile, Kaseeram and Joubert expect diesel to come down by 32 and 58 cents respectively.
‘Fortunately international petroleum product prices – the other factor that determines local fuel prices – also declined along with oil prices in the course of the month,’ said Joubert.
‘The price of Opec (Organization of the Petroleum Exporting Countries oil), which was $96,45 a barrel in September, has averaged nearly 9% lower at $88,10 a barrel in October so far.’
Kaseeram said an increase in fuel prices is not likely in the near future.
‘Most of the world economies are experiencing persistent weak growth, which is the cause for global low demand for oil and hence the current oil glut.
Fuel down, tax up
On the negative side, however, Kaseeram said there is a possibility government will see the price drop as a golden opportunity to increase fuel taxes.
‘In short, the price decrease will be neutralised by further rounds of government levies.
‘It is enticing for government to use fuel levies and taxes to boost the fiscus and we can expect government to continue to do this every year at the time of the budget speech (February-March).’
The Department of Energy will announce the final fuel price changes on 31 October.
