Petrol price: Middle East developments a contributing a factor

A local economist says the massive petrol price drop is motivated by political manoeuvring in the Middle East.

FILE. A local economist says the massive petrol price drop is motivated by political manoeuvring in the Middle East. Picture: EWN.

JOHANNESBURG - A local economist believes political manoeuvring in the oil-rich Middle East has resulted in a significant drop in the fuel price back home.

Petrol is expected to decrease on Wednesday, by between R1,23 and R1,27 a litre.

The price of diesel would decrease by up to R1,05 a litre.

Illuminating paraffin will decrease by R1,44 a litre and liquefied petroleum gas (LPG) will decrease by R2,10 a kilogram.

Economist Dawie Roodt says developments in the Middle East are a contributing factor.

"Another reason has to do with politics, with OPEC trying to keep the price on the low side in order to score some political points against their political opponents, especially in the Middle East."

The last time the fuel price decreased by more than R1 a litre was in January 2009 when the price dropped by R1,37 a litre while diesel decreased by up to R1,67 a litre.

Earlier, the Department of Energy said the main reason for the fuel price decreases is the continued drop in the price of crude oil which led to a decrease in the prices of petroleum products in the international markets.

However, the depreciation of the rand against the US dollar led to an increase in the contribution to the Basic Fuel Price by between 17,92 c/l and 19,75 c/l.

This was off-set by the drop in the crude oil price during the period under review.