Possible petrol price drop on cards

Johannesburg - Prospects for a possible fuel price decrease at the end of October are looking positive, the Automobile Association of SA (AA) said on Tuesday.

"International petroleum prices softened between October 2 and 11, giving an over-recovery of between 10 and 12 cents per litre for diesel, 15 cents for illuminating paraffin and 24 to 25 cents for petrol," the AA said in a statement.

"While the exchange rate has remained largely stable over the same period, with a negative impact of below three cents per litre, the AA cautions that the effects of a possible US debt default make this situation largely unpredictable."

The general view seemed to be that US politicians would smooth out their differences before the October 17 deadline for raising that country's debt ceiling.

"However, if a US default does take place, the effects on international exchange rates and the South African economy will be difficult to predict and could affect our fuel price outlook as well," the AA said.