It has been reported that the petrol price could drop by between 90c and R1 a litre\u00a0 in January 2015.<\/p>\n
The Department of Energy on Monday, December 15 predicted a a R1.03 a litre price fall on January 7.<\/p>
Such a decline would take the Gauteng petrol price from its present value of R12.47 a litre to R11.44 a litre, which would be the lowest since August 2012.<\/p>\n
The Gauteng petrol price peaked at a record R14.39 a litre in April of this year.<\/p>
Azar Jammine, the chief economist at Econometrix\u00a0said the drop in the petrol price was as a result of falling crude oil prices.<\/p>\n
\u201cThings can change a lot between now and the end of the month,\u201d he said.<\/p>\n
A massive drop in the petrol price will be a boon to consumers, increasing their disposable income just after the festive season when most people are on holiday and travel long distances.<\/p>\n
It will also be positive for the inflation outlook, as well as interest rates.<\/p>\n
Elton Bosch, the general manager of NUS Consulting\u2019s South African operations, said on Tuesday, \u201cWe expect crude oil prices to come down slightly within the next few months.<\/p>\n
“But if the Rand continues to fall against the dollar, that nullifies the oil price drop.”<\/p>\n
Oil prices have dropped almost 50 percent since June, an indication that global growth is weak.<\/p>\n
In June, Brent crude reached a peak of $115.71 (R1 344.63) a barrel before falling below $59 for the first time since May 2009.<\/p>\n
David de Waal, the chief executive of Steeple Estate Agents, last Friday commented on the drop in the petrol price when he said, “This comes as a welcome relief to consumer bank balances, following a year of rate hikes and food cost increases.\u201d<\/p>\n
De Waal said lower petrol prices would increase consumers\u2019 disposable income and help make a home more affordable.<\/p>\n
Increased demand for property would, at the least, help support current prices.<\/p>\n
Izak Odendaal, an investment analyst at Old Mutual Wealth, said: \u201cThis will give policymakers some breathing space, as part of the work of raising real interest rates will be done by lower inflation.\u201d<\/p>\n
He said falling oil prices gave central banks worldwide similar leeway.<\/p>\n
Odendaal said South Africa\u2019s real interest rate remained low compared with other emerging markets.<\/p>\n
He said South Africa\u2019s current account deficit was one of the largest at 6 percent of gross domestic product.<\/p>\n
\u201cTherefore, the SA Reserve Bank is expected to continue gradually increasing interest rates,\u201d Odendaal said.<\/p>\n
<\/p>\n