Petrol price drop not elections ploy

Fin24
2014-05-02 22:23
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Petrol will decrease by 15.0 cents/litre (c/l), while diesel will drop by 29.78 c/l in Gauteng. ~ Shutterstock
Cape Town - It is not true that the decrease in the petrol price is as a result of the upcoming elections, according to the energy department.

It announced on Friday that the petrol price will decrease by 15.0 cents a litre (c/l), while diesel will drop by 29.78 c/l in Gauteng.

Also seeing a drop in price is illuminating paraffin by 25.0 c/l and liquefied petroleum gas (LPG) by 4.0 cents/kilogram.

It is the first time that the price of petrol had come down since October last year.

The price drop would take effect on Wednesday May 7, which also marks the country's fifth democratic elections.

This has led to speculation by online readers that the decrease in prices is a move designed to garner votes.

"Still trying one last thing to get votes?" asked Valerie Elizabeth Burns.

A user, called Fiat Prefect, said that it is desperate last minute electioneering to buy votes, adding "my vote is not for sale".

Kenneth Dion Makgopa agreed. "They just want to manipulate us with the decreasing of fuels, what they need is just us to vote for them nothing else".

On a more sober note, De Wet Joubert pointed out that people are always nagging.

"Fuel prices rise, people complain ... fuel prices drop, people complain and blame the government of some form of mislead publicity stunt. This country is unbelievable."

Department of Energy spokesperson Johannes Mokobane re-iterated to Fin24 that factual reasons, such as crude oil prices and a stronger rand, contributed to the decrease.  

"The decrease in the prices of all the petroleum products is due to changes in international factors, namely, crude oil prices, the rand/dollar exchange rate and the prices of finished products.

"The rand appreciated against the US dollar from R10.76/$ to R10.55/$ during the period under review."

Added to this, he said, is also the reduction of the slate levy, which is the money that is collected from motorists to compensate the industry for cumulative under recovery, by 8.87 cents per litre.

Industry experts confirmed to Fin24 that the price drop is not as a result of political interference.

"This is not an elections trick. It is simply the way the price is calculated," said Efficient Group chief economist Dawie Roodt.

Economist and chief strategist at Investment Solutions Chris Hart said: "It was not emotional or political."

Both economists agreed that the key factors affecting the price drop were the rand and the international oil prices.

Welcoming the drop, debt expert Neil Roets told Fin24 the decrease will unfortunately not be much of a breather for consumers.

"We often see that if the petrol price goes up, the price of goods and services increase in accordance with the petrol price, but when the petrol price goes down, the price of goods and services does not go down accordingly."

He said much more is needed to bring sufficient relief to consumers.

 - Fin24

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