Petrol price: AA hopes for more relief in September as fuel levy reduction set to end

Although the petrol price is expected to drop for August, the Automobile Association (AA) hopes there will be another decrease in September.

The Department of Mineral Resources and Energy on Wednesday confirmed that the price of petrol will go down following a reduction of international oil prices.

The Automobile Association (AA) has welcomed the announcement, but noted the temporary reduction of the general fuel levy is set to end.

The levy was reduced from R3.85 to R2.35 per litre after government cut it down by R1.50 initially for two months between 6 April and 31 May.

Government extended the temporary reduction from 1 June until 6 July, with the second reprieve of 75 cents per litre coming into effective on 7 July and will end on 2 August.

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On Wednesday, AA spokesperson Layton Beard told eNCA that motorists would get some relief.

“So if you talk about a reduction of R1.90, we obviously [have to] take 75 cents off of that. Having said that though, I think a R1.15 reduction is substantial [because] it’s not another increase.

“And I do think it will give some relief to consumers even though it might not take us back to the figures that we had in January, which were obviously around R5 cheaper than what we have at the moment,” he said.

Beard said the price of diesel is expected to decrease as well.

“We will have to see what the trend is going forward in terms of reductions long-term. It’s obviously too early to say now whether this is gonna happen again in September… we hope that it does.

“But the trajectory of international oil prices seems to be coming down and if that continues and if the rand could continue strengthening against the US dollar then the outlook could be quite positive. It all depends on the numbers,” he said.

Deregulation

Last week, government officially started the process of deregulating the price of 93 octane petrol in South Africa.

Mineral Resources Minister Gwede Mantashe gazetted the notice of the intention to introduce a price cap on Friday.

Government previously indicated its intention on the matter, saying the deregulation plans would only occur once the Treasury figures out how to recover the R90 billion loss from the fiscus it would see if fuel taxes were removed in one go.

Finance Minister Enoch Godongwana revealed that there were many options on the table to achieve this, such as additional taxes on motor licence renewal fees to fund the Road Accident Fund (RAF).

There had talks of the RAF levy being scrapped from the fuel levy and moving elsewhere, which has been backed by Parliament’s Portfolio Committee on Mineral Resources and Energy.

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