The petrol price is to decrease by 11 cents per litre next Wednesday, the Department of Minerals and Energy announced on Friday.
The department’s Hein Baak said that the price of diesel with a 0,3% sulphur content will also be cut by three cents per litre. Diesel with a 0,005% sulphur content will go down by two cents per litre.
”However, illuminating paraffin will increase by four cents per litre in wholesale price. Paraffin will increase by five cents per litre in the single maximum national retail price.
”Minister [Deputy President] Phumzile Mlambo-Ngcuka approved the implementation of a single maximum national retail price for paraffin with effect from April 2,” Baak said.
He said the retail price will change on a monthly basis from the first Wednesday of each month.
The new retail price of petrol of R5,52 per litre inland means the retail petrol price will have declined by 8,5% since it peaked at a record R6,03 cents per litre in October 2005.
In October, the South African Reserve Bank’s (SARB) monetary policy committee (MPC) said the risks to the inflation outlook had increased due to the high and volatile international crude oil price and would not be ignored.
By the next MPC meeting in December, the MPC noted that no second-round effects were visible and that inflation excluding petrol had continued to ease to 3,2% year-on-year in October from 3,5% in September.
South Africa’s consumer price index excluding mortgage rate changes (CPIX) for metro and other areas, which is used by the SARB for its inflation target, rose by 4,3% year-on-year in January after increasing by 4% in December, the latest data from Statistics South Africa shows.
The SARB inflation target range is from 3% to 6% and 23 out of the past 28 releases were below the mid-point of the SARB’s target range.
Given the tightening in fiscal policy as shown in the February 15 Budget, some economists believe that the latest reduction in the retail petrol price could pave the way for a cut in interest rates at the April MPC meeting. — Sapa, I-Net Bridge