April expected to usher in fuel price savings, says AA

Unaudited data from the Central Energy Fund (CEF) indicates significant decreases in the price of diesel and illuminating paraffin and nominal decreases in the prices of petrol in April.

The Automobile Association (AA) said the expected decreases are good news for consumers, especially considering that mid-month data indicated possible increases in petrol prices.

According to the latest figures from the CEF, the decrease 95 ULP is 1.5c/l while the decrease 93 ULP is given as just under 4c/l. Diesel is showing more notable decreases of about 78c/l while illuminating paraffin is set to fall by R1.39/l.

“The main driver behind the decreases is lower international product prices, while the higher average rand/dollar exchange rate is counterbalancing these gains. The weaker rand is eroding about 40c/l off the decreases, meaning they could have been more significant had the rand been stronger throughout March,” noted the AA.

However, the data only reflects the basic fuel price and other factors such as zone differential costs (the cost of transporting fuel from coastal to inland areas) and adjustments to the slate levy may still be made by the department of mineral resources & energy and energy. If these are made, they will affect fuel prices, but this will only be known once the official adjustment is announced.

“The good news, though, is if adjustments to zone differential costs and the slate levy are made, petrol prices are not likely to increase significantly and diesel and illuminating paraffin prices are still set to come down,” the AA noted.

“The diesel decrease is particularly important because it is a major input cost in the manufacturing, mining and agricultural sectors, and a decrease to this fuel could prevent immediate rising costs in goods and services.”

More good news is that the two main levies on fuel — the general fuel levy and the Road Accident Fund levy — will not be increasing this year.

“These levies are traditionally increased in April, but the minister of finance heeded calls by the AA and in his February budget speech indicated this will not happen this year. Though not a saving as such, any increases would have added additional pressure to fuel prices and we again welcome his decision not to increase these rates for 2023.”

The official adjustment of the fuel prices comes into effect on Wednesday April 5.

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