By Helmo Preuss
The Department of Energy is likely to implement a retail petrol price drop of some 68 cents per litre (c/l) on 5 July provided the daily over-recovery remains near the 23 June level. The wholesale diesel (0.05% Sulphur) price could fall by 62 c/l.
This will be good news for National Arts Festival goers from outside Grahamstown as their petrol cost will fall by 3.8% year-on-year (y/y), while diesel consumers will see a 6.7% y/y drop, which should cut distribution and farming costs.
South Africa’s daily unleaded 95 Octane petrol price over-recovery was 73.3c/l on 23 June, while the diesel over-recovery was 68.2 c/l.
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 will most probably be cut 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 2 June to 29 June and a price announcement is due on 30 June. The average under-recovery for the period 2 June to 23 June for petrol was 67.2 c/l and the average under-recovery for diesel was 60.2 c/l.