Further petrol price decrease expected

12 Jan 2015, Nantong, Jiangsu Province, China --- A Chinese worker holds an oil nozzle at a gas station in Nantong city, east China's Jiangsu province, 12 January 2015. China's crude oil imports rose above 7 million barrels per day for the first time in December, reaching record levels as plunging international prices allowed the world's largest importer to fill strategic and commercial reserves. International crude prices are near six-year lows, revisiting levels last seen in the wake of the global financial crisis. While price controls over transport fuels limit the boost to the Chinese economy, the drop has presented an unusual opportunity for China to increase reserves of crude oil at relatively little cost. China imported 7.15 million bpd in December, bringing its full-year crude imports to a record 308 million tonnes up nearly 10 per cent on the year. Some of that additional demand reflects economic growth --- Image by © Imaginechina/Corbis

The AA said it expects the petrol price to decrease by the second half in January.

Further reductions in the fuel price are on the horizon at the end of January. This is according to the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.

“Although the international price of crude oil has picked up since its low of 1 January, the overall price is still lower than December’s average, and this reflects in the current data,” the AA said in a statement.

“In addition, the Rand/US dollar exchange rate has strengthened from an average of R14.44 at the beginning of the year to around R14.20 now.”

The AA said that the current data showed a drop of around 12 cents a liter for petrol, 36 cents for diesel, and 33 cents for illuminating paraffin.

“We expect this figure may fluctuate in the second half of January,” the association added.

“The Rand continues to firm slightly and it’s not clear what level oil will stabilize around. Whether this will work in favor of fuel users or against them remains to be seen,” the statement concluded.