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Slight drop in petrol price

Feb 24 2017 14:08

Cape Town - The Department of Energy announced on Friday that the pump price of both grades of petrol will decrease by eight cents a litre from next Wednesday.

The retail price of both grades of diesel 0.05% and 0.005% sulphur will be 2c cheaper, while illuminating paraffin will decrease by 8c and 10c a litre for wholesale and the Single Maximum National Retail price respectively.

The maximum retail price for LPGAS will come down by 2c/kg.

The Automobile Association announced earlier that rand strength and a retreat of international petroleum prices have combined to produce a surprise drop in fuel prices at the end of February.

The department said on Friday the rand appreciated against the US dollar during the period under review on average to R13.2899 compared with 13.5831 in the previous period.

This led to a lower contribution to the Basic Fuels Price on petrol, diesel and illuminating paraffin by 13.44c/l, 12.93c/l and 12.80c/l respectively

"After a bit of a stutter at the beginning of February, the rand has continued to firm against the US dollar throughout the month.

"At the same time, international oil prices have come off their mid-month highs and are now testing their lowest levels yet for 2017," the AA said in a statement.

By 13:55 the rand was trading at R12.94/$, an 18-month high, while oil was selling for $56.26 a barrel.

The association said if the rand's strengthening trend is prolonged and oil prices remain around their current levels, it's possible that some of the recent fuel price increases may be reversed in the medium term.

However, the AA warned that the rise in fuel taxes would see the fuel price picture at the end of March begin with a deficit of 39c. This is a combination of an increase of 30c to the general fuel levy, and an increase of 9c to the Road Accident Fund levy. The increases come into effect on April 1.

"It would take quite a substantial effort from both the rand and oil prices to offset the tax hikes and prevent higher fuel prices in April," the AA said.

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