Slim chance of good news on petrol price

BRINGING SOME optimism to the
depressing fuel price issue is news that
the daily unleaded petrol price moved
into an over-recovery situation on
July 8 for the first time since
December 19 2007, according to
Central Energy Fund figures.
But, although an on-going overrecovery
might see the fuel prices drop
at next month’s price adjustment on
August 6, it’s still a slim chance.
According to Fin 24 figures, the
average for the period June 27 to July 8
was still an under-recovery of 39.376c
per litre (c/l), so the daily over-recovery
would have to average at least
18.522c/l for the period July 9 to July
31 to have a neutral position.
On July 8, the daily over-recovery was
only 12.84c/l.
The reason for the good news
on July 8 was largely that the Opec
reference basket (ORB) of 13 crude
oils saw its price drop from a record
US$140.73 per barrel on July 3 to
US$135.21 on July 8.
And, according to I-Net Bridge, SA
international petroleum product prices
are closely correlated with the ORB,
rather than Brent or Nymex crude oil
futures prices which tend to be higher
than ORB.