Petrol price to plummet on Wednesday – thanks to these three factors

If you can wait until Wednesday to fill up your tanks, you will save yourself a few rand in the process: The petrol price is taking a tumble for the rest of the month, with costs dropping across the board on 7 October.

Petrol price to decrease on Wednesday 7 October

The Central Energy Fund has confirmed that the petrol price is now set in stone for the next four weeks. We’ve got a hat-trick of decreases at the pumps, which will be implemented as listed here:

• Petrol: Dropping by 32 cents
• Diesel: Dropping by 90 cents
• Illuminating Paraffin: Dropping by 76 cents

Three reasons why the petrol price is dropping in October

Favourable ZAR rates against the US Dollar

The Rand is 3.2% better off against the Greenback compared to its position one month ago, trimming the petrol price accordingly:

“The Rand appreciated against the US Dollar during the period under review, on average, when compared to the previous period. The average Rand/US Dollar exchange rate for the period 28 August 2020 to 1 October 2020 was R16.72 compared to R17.28 during the previous period. This led to a lower contribution to the Basic Fuel Prices.”

Central Energy Fund

No changes to the Slate Levy

During the period the government review the fuel price, they take the average total of their calculations for each day and work out an average. This bit of number crunching helps them come to a decision: Whether they have the chance to raise prices, or lower them.

They take this figure, multiply it by volumes sold locally within the last month, and voila: One Slate Levy. In October, the government has decided there will be no changes, helping the petrol price on its downwards trajectory for the month ahead.

“In line with the Self-Adjusting Slate Levy Mechanism Rules, the Slate Levy on petrol and diesel will remain at 0.00 c/l with effect from Wednesday 7 October 2020.”

Central Energy Fund

Brent crude oil

At the start of September, the price of crude oil was above $42. It’s now hovering between $40 and $41. There has been something of a stabalisation in the past few weeks, and that’s usually good news for our petrol prices.

Along with the Rand’s performance, fuel costs in SA are also dependent on the global oil prices – given that Mzansi is heavily reliant on imports from overseas to keep the reserves full.