The AA expects significant fuel price cuts when the latest monthly adjustment is made on September 4 by the department of mineral and petroleum resources.
As a result of data showing that consumer inflation is at a three-year low, the association says fuel prices across the board will decrease for the fourth consecutive month.
Unaudited data from the Central Energy Fund (CEF) is showing that 95 unleaded petrol (ULP95) is set to drop by 94c/l, and 93 unleaded petrol by 86c/l. The wholesale price of diesel is expected to decrease by 76c/l, while the cost of illuminating paraffin will drop by nearly R1.01c/l.
“The reason for this welcome news is the perfect combination of a strengthening rand-dollar exchange rate since the middle of August, and significantly lower international oil prices, which dipped around mid-August and increased the over-recovery on the fuel prices in the period under review,” the AA said.
The association said if the predicted decreases materialised, the cumulative effect of the last four decreases would be substantial. For example, ULP93 inland decreases would amount to R2.44/l, which in total will bring about a saving of about R122 on a 50l petrol tank.
However, consumers should take note of the fuel retail margin increase that will come into effect September. The mineral and petroleum resources minister Gwede Mantashe has approved an increase of 5c/l to the fuel retail margin, which kicks in with the official adjustment for September. This may affect the total decrease amounts but only marginally.
“Lower fuel prices are good news for all consumers. Apart from the immediate impact of buying cheaper fuel, input costs across various sectors are not impacted by higher fuel costs. At a time when most South Africans are still struggling to make ends meet, this is welcome news for all,” the AA said.
Fuel review
“Further to President Cyril Ramaphosa’s announcement in Parliament in July of a fuel review, the AA welcomes news that the minister of finance, Enoch Godongwana, will soon table a ‘fuel price intervention plan’ to the cabinet.
“This is a positive development and, we believe, long overdue. We have no illusions that finding ways to mitigate rising fuel costs will not be an easy undertaking, but it is important that the government initiates a process that ultimately seeks to benefit consumers. We will monitor these developments closely and we are, naturally, at the ready to assist government in any way we can in this process,” the AA said.
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