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Another fuel price cut?
 
Economists predict another decrease in the price of petrol in December, but say it is too early to put a number to the predicted decrease.
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Motorists wishing for an extra jingle in their wallets over Christmas can be optimistic - economists are predicting a second fuel price cut - over and above tonight's (Tuesday) drop of 45c a litre.

Economists predict another decrease in the price of petrol in December, depending on the rand/dollar exchange rate.

They say it is too early to put a number to the predicted decrease, but agree it could be a "substantial one".

Dr Azar Jammine, chief economist at Econometrix, said "the oil price has recovered a little and at the moment the rand has strengthened, so we can remain hopeful that there will be another substantial petrol price decrease in December".

He said that while some people had speculated that the price of petrol would escalate to as much as R16 a litre, this thankfully, has not happened.

Jammine said that the predicted decrease depended on whether the rand strengthened against the dollar, and whether the price of oil decreased.

"I am delighted to see that the price has not escalated and considering October and November's decrease, there are grounds for relative optimism for December," he said.

He said the estimated decrease figure would only be announced later in the month.

Gary Ronalds, spokesman for the Automobile Association, said that although it was too early to tell, "a price reduction at the end of the year is looking relatively good".

Ronalds added that to put a number to the estimated decrease would be premature.

"But, if the rand improves, then we are in for a good Christmas present," said Ronalds.

However, Peter Morgan, chief executive officer of the Fuel Retailers Association, said the uncertain political climate might influence the strength of the rand/dollar exchange which would have an effect on the price of petrol.

"Hopefully the rand will strengthen in the next three to four weeks, but the elections in the United States might affect the exchange rate.

"However, there still remains the possibility of a decrease, and that would mean great news for everyone this Christmas," he said.

                                      This article was originally published on page 1 of Daily News on November 04, 2008

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