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Next week critical for SA petrol price

Aug 15 2013 15:04
Carin Smith

Cape Town - There is speculation that consumers could be hit by a 27cents/litre increase in the petrol price on the first Wednesday of September.

Brent oil prices climbed to above $111 per barrel to a four-month high on Thursday on fears that violence in Egypt could affect the Suez Canal or spread in the Middle East, where supplies are already disrupted.

According to economist Mike Schüssler of Economists.co.za, at present there is actually a 27 cent over recovery, which means that prices will come down.

“The price of oil and the increasing oil price may, however, mean that the decrease will be much smaller,” he said.

“ Having said this, the problem overall is that the world economy is just starting to recover and hopefully this oil price hike does not go up further as this would slow growth again at precisely the wrong time.”

He said the current conditions are not bad, but it is killing potential good news of lower oil prices which could boost SA’s growth again.

Peter Noke of Royale Energy, said next week will be critical to indicate what will happen to the South African petrol price in September.

“Ideally you would want international crude prices to decrease to below $100 per barrel and the rand to be below R10 to the dollar,” said Noke.

“It is difficult to say if there will be a ceiling to petrol price increases as anyone who can predict exactly what will happen still has to be born.”

He said the average figure was quite positive for South Africa over the approximately two weeks since the last calculation.

“We were doing an over recovery, but conditions over the last number of days have changed dramatically,” said Noke.

“Petrol is at this stage showing a slight over recovery or possible decrease, while diesel is flat at exactly where it should be.”

It is, however, not likely to stay that way over the next two weeks, in his opinion.

“So conditions during the first two weeks since the last petrol price calculation looked like we could have a price decrease,” he said.

“Now, however, if we look at the trend of crude prices and the rand/dollar, then the little bit of over recocvery we had is now being eaten away.”

He said it would, therefore, be very difficult to say what would happen to the SA petrol price in early September.

- Fin24

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mike schüssler  |  sa economy  |  petrol prices



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