While crude oil prices saw a 15% decrease on Wednesday, following news of ceasefire negotiations between the US and Iran, it is unlikely that South African travellers will see lower airfares and petrol prices any time soon, say experts.
In the early hours of Wednesday morning (April 8), US President Donald Trump announced that negotiations with Iran were under way, contingent on the opening of the Strait of Hormuz. This saw Brent crude oil prices drop by about 15% to an average US$94 (R1 530) per barrel by mid-morning.
However, South African jet fuel and petrol prices will not see immediate relief due to a domestic fuel inventory lag and high refining costs.
Delayed effect
Due to inventory lags, the benefit of lower global oil prices will only reach South Africa once the current high-cost fuel shipments have cleared the pipeline.
“Fuel suppliers purchased the fuel that is currently being exported to and arriving at South African ports, at the price determined prior to this recent drop in the brent crude oil price,” explained Linden Birns, MD of Plane Talking. “So, assuming this price drop is sustained, there will be a natural lag before these lower costs reach the South African market. .”read more…. source:https://www.travelnews.co.za/article/ceasefire-dont-expect-cheaper-fares-soon
