By Zandi Shabalala and Ed Stoddard JOHANNESBURG (Reuters) - South African petrochemicals company Sasol signalled it could cut its dividend to save cash due to the low oil price, sending its shares down as much as 11 percent in their biggest intra-day fall in 16 years. Sasol, the world's top maker of motor fuel from coal, said in a statement its earnings would be negatively impacted by the overall low oil price environment. Oil hit a six-year low in January, although it has since recouped some of those losses. Sasol, which makes about 40 percent of its revenue from oil, said in a statement that it would change its progressive dividend policy of maintaining or growing dividends to one that gave it the flexibility to pay lower dividends. Spokesman Alex Anderson said the company would disclose the new dividend range at its half-year results next month. "The cover would not be far off the 2.2 to 2.8 times range we've used in the past few years until 2014," he said. Sasol's average dividend over the last seven years has been 1,022 South African cents. According to the company's website, Sasol last cut its final dividend in its 2009 financial year. Earlier this month, the company said it expected first-half earnings - due on March 9 - to rise by up to 9 percent after rising output and higher sales offset the softer oil prices. Last month the company implemented a cash saving initiative, including delaying a decision on whether it would build a $14 billion gas-to-liquids plant in the U.S. The company's shares fell 11 percent to their biggest intra-day decline since Sept. 1998, according to Thomson Reuters data, but recouped to trade 7.1 percent lower at 439 rand. Sasol shares have been volatile since last year, losing about 35 percent since an all-time high in June 2014. "By definition a change in dividend policy is a surprise to investors, so you are seeing a sell-off. We are expecting a big dividend cut," one analyst, who has a buy recommendation on Sasol and declined to be named, told Reuters. Oil, in oversupply, hit a six-year low in January, but has since risen more than 35 percent. Analysts say however the recent rally is overblown, with stockpiles of U.S. commercial crude at their highest since records began.