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13 Feb 2006 13:45
The Department of Minerals and Energy could implement a retail petrol-price cut of about 12 cents per litre (c/l) on March 1, given recent trends in both the rand exchange rate and oil prices.
The retail petrol price is adjusted monthly on the first Wednesday of the month in accordance with the previous averaging period’s over- or under-recovery.
The current averaging period runs from January 27 to February 23, and a price announcement is due on February 24.
The over-recovery of the daily petrol price rose to 24,171c/l on February 10 from 17,555c/l on February 9, the latest data showed on Monday.
An over-recovery means that the basic petrol price, based on the daily product price and exchange rate, is less than the basic fuel price used in the calculation of the monthly retail petrol.
An over-recovery therefore implies that the retail petrol price can be lowered at the next monthly price adjustment, provided the government does not introduce a new levy or raise either the wholesale or retail margin.
The rand has been strengthening since it touched R6,79 per dollar on November 15 and is currently trading at about R6,18, while the Organisation of Petroleum Exporting Countries basket price of 11 crude oil varieties fell to $56,63 per barrel on February from $57,17 on February 9 and a recent high of $60,90 touched on January 23 after peaking at a record $61,37 per barrel on September 1 2005.—I-Net Bridge
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