Cape Town - Motorists can expect to be paying less for petrol in November, the Automobile Association (AA) said on Thursday, commenting on unaudited fuel price data released at mid-month by the Central Energy Fund.
This is because heavy declines in international petroleum prices have outweighed a recent spike in the exchange rate.
“The average exchange rate has spiked to around R11.20 to the US dollar and remains stubbornly high, but the good news is that the landed fuel price has dropped by around 10% since the last fuel price adjustment,” said the AA.
“As things stand, motorists will be paying less at the pumps in November and the picture will improve if the exchange rate comes off its current highs.”
Based on the mid-month data, the petrol price is heading for a month-end decrease of 10 cents to 15c per litre.
The picture for diesel is rosier, according to the AA. The AA expects an estimated 32c per litre decline.
Data for illuminating paraffin is also showing a substantial drop of around 27c per litre.
“The consensus from oil-producing nations seems to be that the world will enjoy lower petroleum prices in the near term, but the benefits felt by South Africans will very much depend on our exchange rate,” said the AA.
READ: Oil market proves mightier than Opec
Brent crude fell more than $1 a barrel to a four-year low below $83 a barrel by 10:45 on Thursday as growing concerns over the global economy stretched a four-month rout, according to Reuters.
In the previous session Brent crude edged higher, holding above $85 a barrel after a drop of nearly $4 on Tuesday that pushed prices to the lowest since late 2010 in an oversupplied market.
Worries about oil supply exceeding demand in a slowing global economy have sparked a rout since prices hit the year's high in mid-June. Brent has fallen about $30 since then.
Comments from core Organisation of Petroleum Exporting Countries (Opec) members, including Saudi Arabia, Kuwait and Iran, signalling the group was unlikely to cut output to support the market, have further depressed prices.
The slump has prompted banks to revise down their oil price forecasts.
On Tuesday the International Energy Agency cut its demand growth forecast for oil in 2015 as global economies remain weak.
At the same time shale oil output continued to rise in the United States.
The petrol price has come down from a year-high of R14.39 for 95 unleaded inland in April to R13.61 currently.
Source: Automobile Association
- Fin24