Read more
Petrol price expected to drop in August
The drop in petrol prices will be limited by the reimplementation of the fuel levy
Picture: iStock
After a series of steep petrol price increases, South Africans might be in for some relief.
The Automobile Association (AA) on Friday said fuel prices could decrease in August, based on the unaudited mid-month data from the Central Energy Fund (CEF).
August petrol prices
According to the AA, fuel prices could be affected as follows:
- 95ULP petrol down by around 90c/l,
- 93ULP down by around R1.07/l,
- diesel down by around 91c/l, and
- iIlluminating paraffin down by about 94c/l.
The AA, however, said that South African motorists are likely to see smaller drops in petrol (15c/l) and diesel (32c/l) prices due to the reintroduction of the general fuel levy.
Before motorists get too excited, the AA warned that the data could change.
“We must, however, be cognisant of the fact that this is mid-month data, and that price outlook may change over the next two weeks before the August adjustment is made,” the AA said in a statement.
ALSO READ: It’s time to consider proper fuel saving
Exchange rate
The main reason for the fuel price decrease is the drop in international petroleum prices. This drop is not as much as it could be in South Africa due to the weaker Rand/US dollar exchange rate.
The drop in prices is also limited by the reimplementation of the fuel levy, which is 75c/l. Government had temporarily reduced in the general fuel levy, to ease the burden on South Africans’ pockets.
Fuel levy
Due to the fuel levy, South Africans won’t be seeing as much relief at the petrol pumps.
“Given this, and based on the current data, the decreases to the prices for petrol and diesel are expected to be around 15c/l and 32c/l,” the AA said.
Despite the expected decreases, the fuel price in South Africa remains high.
“Decreases offer immediate relief but increases filter into the economy over time, especially as those sectors affected by them don’t immediately adjust their prices downward but instead wait for more consistent fuel cuts that lower their input costs.”
Because of this, the AA is renewing its call for government to relook at the way it structures fuel process.
“We stand by our call that a review of the fuel price structure, and an audit of the components that comprise the fuel price, is essential and long overdue to offer sustainable solutions that mitigate against rising fuel costs in the country,” it said.
