With the current financial chaos gripping the markets the world over, we may have a bit of relief on Friday in South Africa when the Central Energy Fund releases the latest petrol and diesel prices. The price of petrol could drop by 35 cents according to predictions from analysts whilst diesel could go down by 20 cents a litre. The prices could drop because of the falling world oil prices but we may not get the full benefit of these falling prices because of the weakening of the rand against the US dollar.

But looking at it a bit more closely, the price of fuel should drop down by a bit more than predicted. A few months ago, the oil price was around $125 a barrel with the rand at R7.50 to the dollar. That equates into a rand oil price per barrel of about R938. Today the oil price is around $60 per barrel with the rand at around R11.50 to the US dollar. This translates to a Rand oil price of R690 per barrel. Now if you look at the difference between R938 and R690, that is a decrease of about 27% and in that space of time we would not have had a 27% drop in pump prices. Yes there are other factors that going into calculating the price of fuel when it reaches the pump but hopefully we could experience a bit more than a 35 cent decrease come Friday, that is even if we get a decrease at all.

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