South Africans can expect some relief at the pumps in August based on unaudited mid-month data from the Central Energy Fund (CEF), says the Automobile Association (AA).
This would have meant 95ULP petrol down by about 90c/l, 93ULP by about R1.07/l and the wholesale price of diesel decreasing by about 91c/l. Illuminating paraffin is also set to drop by about 94c/l.
The AA said the government has indicated it will not alter its position that the initial R1.50 it cut from the GFL in April and May, and which was halved to 75c/l for June and July, will end in August. This means the GFL returns to its normal rate of R3.93/l in August.
“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. Although these would be more significant if the GFL relief was still in play, a reduction is nonetheless welcome and will ease some pressure on consumers,” the AA said.
“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,” it said.
According to the data, the drop in international petroleum prices is driving the decreases, but they are being offset by a weaker rand/US dollar exchange rate, which is eroding otherwise sharply declining fuel prices.
The association further noted that despite the forecast decreases, fuel prices in SA remain high and the previous sizeable increases will still impact the economy in coming months.
“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.
"We stand by our call that a review of the fuel price structure and an audit of the components that comprise the fuel price are essential and long overdue to offer sustainable solutions that mitigate against rising fuel costs in the country,” the AA said.