Petrol price to drop by whopping 34 cents

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Authorities expect the petrol price to drop by as much as 34 cents to the litre at the end of the month, following another strong performance by the rand.

International petroleum prices have actually increased during the period under review, however, the rand has rallied well against the US dollar this month. During the period under review, the rand was trading at R12.30 to the dollar. This after opening December at R13.80 to the dollar.

There is little doubt that much of that has had to do with the election of Cyril Ramaphosa as the new President of the African National Congress (ANC) this month.

“The rand has had a very strong run against the dollar since the middle of the month, gaining considerable ground after the ANC’s electoral conference chose Cyril Ramaphosa as the new leader of the party,” read a statement by the Automobile Association this week.

“We expect petrol will be down by up to 34 cents a litre, diesel by 26 cents and illuminating paraffin by 28 cents,” added the AA.

“The Rand – and, by extension, fuel prices – have proven vulnerable to political developments in South Africa over the past year. Cyril Ramaphosa’s political and fiscal position ahead of the February 2018 budget speech is likely to be the most influential determining factor for fuel price movements in the short term.”

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