petrol price to be slashed by 24c/l?
17 January 2007

The petrol price could be cut by up to 24 cents a litre early next month — bringing even further relief to motorists as oil prices fall.

However, the cut will be dependent on the daily over-recovery, which will have to remain at or above the level it reached on 15 January — meaning the basic petrol price based on the daily product price and exchange rate must remain less than the basic fuel price used in the calculation of the monthly retail petrol.

South Africa's daily unleaded petrol price over-recovery eased to 31.869cents a litre on 15 January from 34.879 cents a litre on 12 January.  The Department of Minerals and Energy will either cut or raise the petrol price on 7 February.  A February 2007 retail petrol cut of 24 cents a litre would bring the total cut to 130 cents a litre since the retail petrol price peaked at 704 cents a litre in August 2006 in Gauteng.

The average over-recovery for the period 28 December to 15 January was 15.402 c/l.

The Opec Reference Basket of 11 crude oils — which SA's international petroleum prices are closely correlated to, as opposed to Brent or Nymex futures prices — saw its price drop from a record $72.67 per barrel in August last year to $48.65 on 12 January.

This is the first move below $50 per barrel in 19 months.

i-net bridge, www.business.iafrica.com