Tuesday, October 28, 2008

The petrol farce...

I read this morning that the price of petrol is going to drop by 35cents a litre, whoopi!

Reason for the decline is the drastic decline in the price per barrel of oil currently around $60 which is the lowest its been since Feb 2007, but we aren't getting the full decrease in the price due to the drop in the value of the Rand.

But, looking back at previous prices in March 2007 the price of petrol at the coast was R6.43/lt (data from this page) The Rand/US Dollar exchange rate was only at R7.38 to the dollar and the price of crude oil was $65 per barrel.

So why does our price only decrease to just under R9.00 a litre, you could talk about inflation and the cost of delivery etc but in just 18months inflation has caused the price to increase by R3 a litre?

The current rand / US Dollar exchange rate is at R11 to the dollar which in some way does explain the small decline but how things have changed in just a couple of months considering the crude oil price went from $65 to $150 and then back down to $60 - somewhere someone is making a ton of money buying and selling the oil...

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Afrigator