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Relief as petrol price drops 28c/l

4 Nov 2013

The petrol price decrease of 28 cents a litre‚ which takes effect from Wednesday, 6 November, because of an improved rand against the dollar and lower oil prices‚ is expected to offer relief to deeply indebted consumers.

The petrol price drops 28c/l on Wednesday. Image: Cool Design Free Digital Photos

The Department of Energy said petrol would decrease 28c/l while diesel would drop 15.2c‚ as a result of the strengthening of the rand against the dollar to R9.93 in October contributing to a decrease of 4.0 c/l in the basic fuel prices.

The department said the main reasons for the strengthening of the rand against the dollar were the termination of the US government shutdown as the US political parties reached agreement to increase the US debt ceiling. The expectation that the US Federal Reserve Bank would maintain its current level of economic stimulus had added to the healthier picture.

"The rand was further boosted by positive data from manufacturing and mining output‚ retail sales‚ motor sales and quarterly unemployment in the country‚" said the department.

The oil price decrease of an average of US$3 a barrel helped matters.

Anticipated positive discussions between Iran and the world powers (US‚ UK‚ France‚ Russia and China) on Iran's nuclear program will hopefully lead to the easing of international sanctions against Iran's oil exports‚ said the department in its release.

Meanwhile‚ Saudi Arabia is producing crude oil at its fastest pace in three decades and the US is pumping its most crude oil since 1989.

The increase in North Sea crude oil production after the completion of seasonal maintenance on oil fields‚ despite very low levels of crude oil exports by Libya‚ is another positive factor for prices.

But chief executvie of Debt Rescue‚ Neil Roets‚ said that while decreases of this magnitude were to be welcomed‚ consumers should not see this as an opportunity to stack up even more debt.

According to the National Credit Regulator's Consumer Credit Market Report (CCMR)‚ the total outstanding gross debtor's book is sitting at R1.47trn. This represents money owed by consumers in the form of mortgages‚ vehicle finance‚ credit cards‚ store cards‚ personal loans‚ short-term loans‚ pension and insurance-backed loans.

Of the 20m credit active consumers in SA‚ more than 9m are not managing to keep up with their debt repayments.

Source: I-Net Bridge

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