Oil’s slump brings relief at the pumps

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Oil’s slump brings relief at the pumps

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Published Date: 2018-12-31 | Source: Stephen Gunnion | Author: Stephen Gunnion

Oil’s slump brings relief at the pumps

Petrol will fall by at least R1.20 a litre this week as concerns about global growth weigh on the oil price.

A sharp fall in the price of oil will result in a big drop in fuel prices as 2019 gets underway. The Department of Energy (DME) says petrol will fall by between R1.22 and R1.23 a litre from Wednesday, depending on the octane, while the price of diesel will decline by R1.54 to R1.56 a litre. Illuminating paraffin will go down by R1.23. That follows a significant cut in prices at the start of the month.

Fuel prices are adjusted on the first Wednesday of every month according to a number of local and international factors including the oil price, importation costs and the average level of the rand. While the rand weakened slightly from R14.09 to R14.18 against the US dollar, the average Brent Crude oil price decreased from $65.09 to $58.28 per barrel during the period under review. The DME says this was due mainly to concerns about the growth in demand as stock markets weakened because of the confusion stemming from the postponement of a Parliamentary vote on the UK's exit from the European Union.

While the price of oil rallied the most in two years on Wednesday, it fell below $50 per barrel for the first time since July 2017 on Thursday before recovering slightly on Friday. In October, oil traded as high as $86.74. Concerns about global growth, rising US inventories and a supply glut are also weighing on oil.



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