Economists say it is only a matter of time before the rising price of oil puts pressure on the petrol price, causing it to rise yet again.
Econometrix’s senior economist, Tony Twine, says that it is too late for the oil price to affect the current petrol price, but that it would certainly take the petrol price up in May by another 25c. This would take the petrol price in Gauteng from R8,91 to R9,16 a litre. He says if the price spikes continue it will mean another petrol increase in June.
Twine says there is no apparent logic in the oil price being at today’s levels and, although it is difficult to speculate, he said that in two to three years’ time the prices might return to $50 to $60 a barrel.
Most South Africans say the price of petrol has had a significant impact in their lives and another increase would be unbearable.
Some analysts questioned by the Mail & Guardian cited the steadily depreciating dollar, which drives investors to look for alternate investment in hard commodities such as oil and gold, as the main reason. Crude oil rose to record high of $113,93 a barrel earlier this week.
The Energy Information Administration forecasts the price of a barrel of crude to be about $85 a barrel through 2008, which is higher than its previous forecast of $70 a barrel made in October.
A senior economist from Credit Guarantee Insurance Corporation, Luke Doig, in a recent interview estimated increases of between R9 and R11 for fuel and diesel prices respectively.
“Current petrol and diesel prices are R8,91 per litre and R9,38 per litre [wholesale] respectively, with under-recoveries currently standing at 23c per litre and 42c per litre,” said Doig. “With oil prices again reaching record highs of $112 per barrel and no end in sight for the beleaguered dollar, such peaks for fuel prices may not be far off.”