If there are no changes in other elements of the petrol price apart from the basic fuel price, the price of petrol could be reduced by 23c per litre on 3 September.
This is according to Dr Azar Jammine, chief economist at Econometrix. “Depending on what impact factors other than petrol have on the overall Consumer Price Index (CPI) inflation rate for July, August and September, one is therefore looking for the overall CPI inflation rate to decline back to around 6% for September, or even marginally less,” he said.
And despite the rand’s poor performance that saw it trade at R10, 19 against the dollar on Monday, Efficient Group economist, Dawie Roodt, told Fin24 that the rand was strong enough to counter the recent increase in oil. He predicted that after next month’s dip, the petrol price will be flat for the rest of the year.
Other factors that could depress inflation
Jammine added that in the run-up to the September’s inflation figures, there are a number of other consumer prices that could have an impact in holding back inflation over and above the petrol price.
“Firstly, food inflation might begin to drop back slightly. This is due to the decline of international prices of wheat and maize in recent weeks and months on account of favourable crops in the US grain-growing regions. This has led to a marginal oversupply,” said Jammine.
He explained that as a result, domestic agricultural futures prices of maize had fallen to levels below those which prevailed a year ago and in the case of wheat are no more than at the same levels as those of a year ago.
“Ultimately, this could feed through into reducing the inflation rate of food from current levels around 7%,” said Jammine.
What could prevent price dips?
Jammine warned though that there is a risk that some of the pass-through effects of the lower rand might yet come to materialise. “There can be little doubt that, in many instances, companies have taken out forward cover to protect themselves against having to pay more for future purchases of imports and this may well have insulated them from having to increase prices proportionally,” said Jammine.
Laura Campbell, economist at Econometrix, added that the volatile situation in Egypt could also see oil prices being pushed up. And combined with the weakening rand, September’s petrol price dip might not be as big as anticipated.
How to save fuel
The Department of Energy has provided Justmoney with the following tips on how to save money on fuel:
• Lighten the load in your vehicle.
• Use the air conditioner only when is necessary.
• Reduce idling time (switch off the vehicle if the waiting is going to be more than a minute and avoid drive-throughs).
• Travel early or later to avoid peak traffic.
• Resolve minor and major car service issues (this could result in big savings on fuel).
• Always use the recommended grade of motor oil for your car.
• Always change to the higher gear (driving in a lower gear than you need wastes fuel).