Petrol price drop welcomed

Experts are predicting a positive knock-on effect on the South African economy.

FILE: The significant drop in the fuel price has been widely welcomed this afternoon with economists predicting a positive economic knock on effect. Picture: EWN

JOHANNESBURG - The significant drop in the fuel price was widely welcomed on Friday.

Experts are predicting a positive economic knock-on effect.

The Energy Department announced this afternoon that the petrol price will decrease by 69 cents a litre from Wednesday.

Diesel will cost 53 cents less, while illuminating paraffin will go down 49 cents. LP Gas will drop by 21 cents.

Energy Department acting director general Wolsey Barnard says this will have a significant impact.

"It is important," he said. "Any decrease in energy commodity prices like petrol will have very positive effects on our economy."

Earlier this month, the Automobile Association (AA) predicted that the petrol price would plummet by as much as 70 cents per litre.

The association's Marius Luyt says, "The positive out of this is it means more money in the pocket of the consumer at the end of the day."

The department says the main contributing factor to the fuel price decrease is the continual drop in the crude oil prices, which fell to about $80 per barrel, during the period under review.

The slate levy on petrol and diesel will remain unchanged at zero cents per litre.

Economist Dawie Roodt says the drop in fuel price is good news for South Africa.

"The global economy is also slowing down and South Africa is an exporter of other commodities and their prices are also falling."