The Department of Minerals and Energy could implement a retail petrol-price cut of 24 cents per litre (c/l) on February 7, provided the daily over-recovery remains at or above the January 15 level.
South Africa’s daily unleaded petrol price over-recovery eased to 31,869c/l on January 15 from 34,879c/l on January 12.
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.
A February 2007 retail petrol cut of 24c/l would bring the total cut to 130c/l since the retail petrol price peaked at 704c/l in August 2006 in Gauteng.
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 December 28 to February 1 and a price adjustment announcement is due on February 2. The average over-recovery for the period December 28 to January 15 was 15,402 c/l. — I-Net Bridge