Data published by the Central Energy Fund (CEF) points to the possibility that South Africans may be catching a breather at the pumps in August.
The data takes into account market conditions from the end of June up to 14 July and shows the prices for petrol could decrease by up to R1.08 per litre, whereas diesel could also go down by 94 cents per litre, reported BusinessTech.
According to the CEF, local motorists can expect the following fuel price adjustments in August:
- Petrol 93 – Decrease of R1.08 per litre
- Petrol 95 – Decrease of 98 cents per litre
- Diesel 0.05% – Decrease of 92 cents per litre
- Diesel 0.005% – Decrease of 94 cents per litre
- Illuminating Paraffin – Decrease of 95 cents per litre
However, while these welcome changes are possible, they will be undermined by the government’s full removal of the tax holiday on fuels which will see 75 cents per litre tacked back onto the prices of all fuel types in the country next month.
If the ruling party does not extend the intervention past August, the above adjustments will only result in a maximum of 33c/l decrease in prices of petrol and 19c/l for diesel.
Additionally, potential changes in the Slate Levy and retail margins must also still be taken into account and these can only be determined at month-end, said the CEF.
Therefore, South Africans may not see much change at the pumps come August.
Exchange rates and oil prices
Regardless of interventions, South Africa’s fuel prices are determined by two main elements, the rand/US dollar exchange rate and international oil prices.
The depreciating rand has dealt the biggest blow to fuel prices over the past few weeks, reaching a new 22-month low and now sitting around the R17/dollar mark.
This alone has contributed between 90-98 cents per litre to the current fuel price expectations.
As such, the biggest reprieve comes from lower international oil prices, with Brent Crude poised to end the week below $100 per barrel for the first time in months.
Thus far, this positive turn of events has assisted in removing R2 per litre from the expected fuel price adjustments in August.
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