Chief Economist Kevin Lings comments on the recent drop in the petrol price.

1. Firmer exchange rate
means lower petrol price
The Department of Energy announced on 2 June 2017 that the petrol price will decrease to 25c/l as of
Wednesday 7 June. This is due to a strong Rand/Dollar exchange rate in the latest fuel price review period, from
26 April 2017 to 1 June 2017, decreasing the petrol price by almost 11c/l. It is also a result of a lower oil price,
subtracting a further average of 14c/l from the fuel price.
Consumers can now expect to pay R13.54 per litre for 95 Octane (ULP, Gauteng). The price of diesel will
decrease by 23c/l, while the price of paraffin will fall by 30c/l, and gas by 77c/kg. This drop in the fuel price means
that the price will be 85c/l below the April 2014 record high of R14.39.
The petrol price drop will result in a minor drop in the monthly consumer inflation rate by 0.1 percentage points
(based on the new CPI weights).
Overall, this is encouraging news, as last month saw consumer inflation move convincingly back inside the
Reserve Bank’s target range, where it’s expected to remain until the end of 2018.
STANLIB is an authorised financial services provider
By: STANLIB Chief Economist, Kevin Lings