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Agriculture

Big diesel price drop on the cards

───   09:00 Fri, 19 Aug 2016

Big diesel price drop on the cards | News Article

Bloemfontein - Economists are predicting that the price of diesel could drop to almost R10 per litre next month.


Agbiz economist Wandile Sihlobo said in a statement the preliminary estimates from the Central Energy Fund are pointing to a diesel price decrease of 89 cents per litre.

This is largely due to the strengthening of the Rand by about 6% against the dollar this month. Brent crude oil prices are also down 4% from the July average.

Sihlobo explains that in grain production, diesel costs comprise about 11% of the total production costs. He says with harvesting of the summer grain crop virtually complete, fuel usage in this sector is relatively low at present. 

However, transport of grain is still ongoing and savings could filter through there. He says the total maize production estimate is 7,3-million tons.  He says deliveries for “week 1 to 14” were estimated at 5,2 million tons, which suggests more maize will be delivered in coming weeks.

The full statement can be downloaded here:

20160815 UPDATE, South African fuel prices to ease in the coming month – 16 August 2016.pdf

Source: Agbiz

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