Oil Plummets Petrol Drops by Almost R2
As the price war between oil-producing countries continues, in the midst of the Covid-19 crisis, the price of oil has plummeted to almost less than it costs to produce and ship.
Russia and Saudi Arabia have been locked in a massive game of oil price chicken which has seen the price per barrel drop below $25/barrel.
Petrol (95): A R1.88 reduction inland and R1.94 on the coast
Petrol (93): A R1.76 reduction inland and R1.82 on the coast
Diesel: A R 1.34 reduction inland and R1.40 on the coast
Paraffin will be dropping by R1.84 inland and R1.98 on the coast
Why So Little Given The Massive Price Drop?
At the same time, the Rand has taken significant knocks in the face of the Moody’s rating agency downgrade of SA investment to “junk” status and investors shifting to US investment. This means that though the price is a whole lot less it is costing more rands to pay for supply.
This month also sees new taxes coming into effect with regard to fuel which is making the drop seem less impressive than it is.
When the Game Of Chicken is Over
Consumers should be aware that these reduced prices will not last too long as one of the two countries facing off are likely to eventually flinch or they may mutually decide to push up prices again. Then we will see some massive jumps in the price of fuel and consumers are in for some large increases in transport costs (and the knock-on price effect on food and products).