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Herald Reporter
The maximum price of petrol dropped significantly yesterday for the second time this month from US$1,70 a litre to US$1,61 a litre, as the blend ratio was restored to 20 percent ethanol, while diesel prices fell from US$1,80 to US$1,76 a litre.
Regulator Zera sets maximum prices using a formula that starts with the actual landed cost of fuel, then adjusted in recent weeks by the falling taxes the Government is charging as it tries to stabilise prices. Retailers can charge less for fuel, and are encouraged to do so as to increase market share, but may not charge more.
This is the second time this month that Zera has been able to cut the maximum price of fuel, after having to approve rises triggered by the global rise in crude oil prices as a result of the easing of the Covid-19 pandemic and thus an upsurge in the global economy and the supply switches by some countries following conflict in the Ukraine.
Increasing the ethanol percentage in blend helps to reduce petrol prices since ethanol at present is cheaper than petrol, so increasing its percentage in the mix reduces the final retail price. As it is a local product from the Lowveld, the tax structure is different as well.
In local currency the maximum prices are $727,69 a litre for diesel and $667,43 a litre for blend.
Online Reporter