A slight drop in fuel prices on the cards

The Automobile Association, which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund, says the stability on international petroleum markets and a stronger exchange rate may lead to a drop in fuel prices next month.

“The current data shows the prospect of a welcome 32 cents-a-litre drop in the price of diesel, and 27 cents for illuminating paraffin. Petrol hasn’t fared as well, with a slight increase of six cents a litre predicted,” the associations explains.

They add that the exchange rate’s performance is coming very close to nudging petrol into a decline, and if the current trends continue, there may be across-the-board relief from the recent series of price hikes at month-end.

The Rand has continued on the strengthening trend which emerged in mid-March, and has gained almost 50 cents against the US dollar since that time. “Meanwhile, international petroleum prices have been stable over the same period, allowing the Rand to leverage its recent strength.”

The AA reiterated its comments to the Parliamentary Portfolio Committee on Mineral Resources and Energy, in which it called for a review of both the fuel price structure and fuel taxes. “Fuel is one of the most heavily-taxed commodities in South Africa. It is right and proper for the government to ensure that the pricing structure is still appropriate,” it concludes.