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.