With effect from Wednesday, 2 June 2010, the SA fuel price will be adjusted down. The retail petrol price (all grades) will fall by 27 cents per litre, or the equivalent of 3.1%m/m, while the price of diesel (all grades) will decline by a recommended 15 cents per litre, or 1.9%m/m. Petrol (95 octane in Gauteng) currently costs R8.72 per litre, and will now decline to R8.45 per litre. Diesel (0.05% sulphur, Gauteng) currently costs R7.81 per litre, and should fall to around R7.66 per litre.
During the past month, the average international product price (international refined fuel price) of Petrol and Diesel decreased, while the Rand/US Dollar exchange rate actually weakened. The average Rand/US Dollar exchange rate for the period 20 April 2010 to 27 May 2010 was R7.6575 compared to R7.3749 during the previous period. Fuel prices are adjusted so that an over or under recovery during the prior month is corrected in the following month.
The decline in the petrol price will deduct 0.1 of a percentage point from the monthly change in the June inflation rate.
Since the end of 2009 the petrol price has risen by a net 6.7%, which is well above the increase in inflation for that same period. Interestingly, if the SA petrol price had risen in-line with SA’s overall inflation rate since 2004 the petrol price would be around R5.55/l and not the current R8.45/l. In other words, the fairly persistent increases in SA’s petrol price over the past few years has certainly been net negative for SA’s overall inflation performance.
The next fuel price change was scheduled for 7 July 2010. However, the Minister of Energy has decided that, to stabilise fuel prices during the FIF World Soccer Cup Tournament, the next fuel price change will only be effected on Wednesday, 14 July 2010.
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