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Fuel price cut expected next month
By Teetee Zwane - SWAZI OBSERVER-16-Sep-2009
WHILE South Africa is anticipating a major fuel price cut next month, local industry stakeholders are not so sure that may be the case in the country, but there are still hopes of such.
“This is a volatile market and we continuously watch world markets to monitor prices,” said Swaziland Fuel Retailers Association Chairman Harry Nxumalo. “As retailers, we are happy to see a downward movement of prices, especially in the price of crude oil, which we’re hoping will either stabilise or go down further.”
He said stakeholders were hoping last year’s situation, when the price of crude oil hit all record highs of over US$100 per barrel would not be repeated this year as this would be bad for the global economy, adding that recovery in this instance would be very slow and difficult. “A lower price in the barrel of crude oil means lower prices in fuel, which would definitely boost the economy. That’s why as retailers, we’re hoping the crude oil price stabilises or goes further down. We are anticipating a cut in the fuel prices.”
Meanwhile, Nxumalo noted that a cut in fuel prices would be more than welcome in the country as the price controller (natural resources and energy ministry) had decided to keep prices constant in the past two months despite increases in South Africa.
Early this month, the retail price of all grades of petrol increased by 36c a litre in South Africa and this was attributed to the average rand/US dollar exchange rate, which had weakened when compared to the previous period. Prior to this, another hike in fuel prices had been effected in July followed by a subsequent cut in August. Analysts are anticipating a fuel price cut between 40c-50c next month.
“We will look at what happens next month and how it implicates on us. Depending on the prevailing situation, we will then review whether or not to cut or increase prices,” said Nxumalo.
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