If you wanted an early Christmas present then you certainly have gotten one! The retail price of all grades of petrol will decrease by a staggering 161 cents a litre on Wednesday December 3, the department of minerals and energy announced today (Friday). This decrease comes off the back of a 45 cents drop in November. Certainly good news on the inflation front.

Diesel prices will also decrease, with 0.05% sulphur falling by 81 cents and 0.005% by 80 cents. Wholesale paraffin decreases by 75 cents and illuminating paraffin by 100 cents.

Petrol in Gauteng now costs R7.35 a litre from R8.96 before, and it is now R7.11 at the coast from R8.72 before.

Some good news for consumers, Inflation came in at 12.4% in the month of October compared to its 13% level for September 2008. This could just signal that a rate cut may not be too far away. Inflation hit a peak of 13.6% in August but now it looks like it is starting to head towards the central banks target of having inflation being between 3 - 6%. But still this rate of 12.4% is relatively high but there is hope it can decline further in December and January when the fuel prices are expected to come down. So now it is just a matter of waiting to find out if the central bank decides to cut interest rates next month. That would surely be a great Christmas present for consumers in South Africa.

We may be in for a bit of a Christmas cheer come December 3 when the The department of minerals and energy (DME) could cut the price of petrol by R1.65, provided the daily over-recovery remains at or above the November 21 level. This would mean that the price of petrol would have dropped by R3.39 since the price peaked at R10.70 a litre in Gauteng in July. The petrol price was cut by 30 cents per litre in August, 74 cents in September, 25 cents in October and by a further 45 cents in November. As long as the world oil prices remain at the levels they are and the Rand does like wise we should be in line for a petrol price cut next week.

The head of Transnet, Maria Ramos is going to leave Transnet at the end of February next year and take over as the head of Absa, replacing Steve Booysen as chief executive. There is no doubting Ramos’ credentials. There are very few people available who could do a greater job than she has done. She took over at Transnet in 2003 and then it was making a loss of R6.3 billion but now Transnet has posted a profit of R4.3 billion. A great turnaround in such a short space of time. Of note in this transformation was Ramos’ decision to move ownership of loss-making SAA (South Africa Airways) back to the government and sell the Victoria & Alfred Waterfront property in Cape Town for $1 billion (R11 billion).
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The JSE closed 5.02% in the red today (Thursday). This has resulted in a three year low for the all share index as it touched 17 814 points. The drop in the JSE was attributed to weak Dow and other global markets, which remained down under the weight of negative conditions. Analysts are saying that this drop in the local market is part of a broader correction and they expect the drop to continue.

The JSE was also not helped by news that Impala Platinum has suspended its share buy-back programme. Shares in Impala, the world’s second-largest platinum producer, fell 17% today.
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The World Bank said today (Wednesday) that it plans to triple its lending to developing nations this year in an effort to prevent a “human crisis” that has been brought about by economic turmoil.

The amount the World Bank lends to developing countries such as China, India and Brazil could reach $35 billion for the 12 months ending June 30. That’s almost triple the $13.6 billion doled out to developing countries over the last fiscal year. The bank said it is prepared to commit up to $100 billion over the next three years, with the majority of the funds to be made available through its International Bank for Reconstruction and Development (IBRD).

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The rand lost ground today (Tuesday) after Standard & Poor’s joined the chorus of concerns about South Africa’s current account deficit in cutting its outlook to negative from stable. Announcing the outlook downgrade late on Tuesday, Standard & Poor’s credit analyst Remy Salters said: “The outlook revision reflects pressures on South Africa’s balance of payments, which increase the risk of further currency depreciation and a sharper-than-anticipated correction in the current account deficit, with attendant effects on prospects for trend growth and fiscal outturns.”

This news does not bode well the the South Africa economy. Any negative sentiment in the markets is not good. At 18:00 the rand was bid at R10.3010 to the dollar from a previous close of R10.0050. It was bid at R12.9416 to the euro from a previous R12.7555 and at R15.9119 against sterling from R15.6521 before.