The Department of Minerals and Energy could implement a retail petrol-price cut of 66c per litre (c/l) on October 4 provided the daily over-recovery remains at or above the September 18 level.
South Africa’s daily unleaded petrol price over-recovery rose to 68,914 c/l on September 18 from 64,652 c/l on September 15.
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 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 September 1 to September 28 and a price announcement is due on September 29.
The rise in the over-recovery is entirely due to a drop in international product prices, as the rand exchange rate used to calculate the basic fuel price was 6,8169 per United States dollar on August 9 and 7,337 on September 18. — I-Net Bridge