AA: Petrol price could drop by over R1

The price of diesel could also drop by as much as 85 cents a litre.

FILE: The price of petrol and diesel look set to drop dramatically in the first week of next month with the price of oil still below $60 a barrel. Picture: EWN

JOHANNESBURG - The price of petrol and diesel is expected to drop sharply in January, the Automobile Association (AA) said on Wednesday.

This as the crude price remain below $60 a barrel.

The AA says despite the rand at record lows against the dollar, fuel prices will definitely plunge.

The oil price has fallen dramatically over the past few weeks with Organisation of the Petroleum Exporting Countries (OPEC) deciding not to increase output.

The AA's Marius Luyt says, "Petrol is set for a drop of up to R1,07 per litre while the decline with diesel is likely to be around 85 cents."

With fuel now set to drop almost R3 over a four-month period, this will be good news on the inflation front.

Business confidence also up for November.

The major downside to the economy at the moment appears to be weak rand and power supply issues.