DESPITE the recent increase in international oil prices due to the turmoil in Egypt‚ the retail petrol price could still be cut by 20c/l on September 4‚ data from the Central Energy Fund on Monday showed.
The daily overrecovery on August 16 was 14.205c/l‚ while the average for the period August 2-16 was an overrecovery of 25.244c/l.
An overrecovery means the basic petrol price — which is based on the daily product price and the rand/dollar exchange rate — is less than the basic fuel price used in the calculation of the monthly retail petrol price.
An overrecovery therefore implies the retail petrol price will most probably be decreased at the next monthly price adjustment.
However‚ the government could introduce a new levy or raise either the wholesale or retail margin.
The retail petrol price is adjusted on the first Wednesday of the month in accordance with the over-or underrecovery in the previous averaging period.
The current averaging period runs from August 2 to August 29 and a price announcement is due on August 30.
The Department of Minerals and Energy could therefore implement a retail petrol price cut of about 20c/l on September 4‚ provided the daily overrecovery remains near the level seen on August 16.
However‚ the wholesale diesel (0.05% sulphur) price could rise by 4c/l.
The diesel price sometimes diverges from the petrol price as diesel prices are more sensitive to demand in Europe‚ where the summer holiday driving season is under way. - © BDlive 2013