As of the 13th of January 2023, data collected by the Central Energy Fund (CEF) points to a further drop in fuel prices come February, marking the second consecutive month of reductions.
The current data points to a potential decrease of 25 cents per litre for petrol and up to 63 cents per litre for diesel, reported BusinessTech.
These expectations come off the back of an appreciating rand, which has held firm under the R17/US dollar mark for a good part of 2023, as well as a recent dip in international oil prices, though these prices have since returned to a level of around $85 a barrel after selling for $77 a barrel a week ago.
According to the CEF, South African fuel prices are expected to be adjusted as follows in February:
- Petrol 93 – Decrease of 18 cents per litre
- Petrol 95 – Decrease of 25 cents per litre
- Diesel 0.05% – Decrease of 50 cents per litre
- Diesel 0.005% – Decrease of 63 cents per litre
Keep in mind that the official price changes that will take effect next month must still be determined, and will also take into account elements such as potential changes in retail margins and levies and taxes.
Therefore, February’s adjustments could look significantly different from the mid-month snapshot as the latter only considers the exchange rate and fluctuations in international petroleum product prices.
Potential fuel tax hike on the horizon
While February is expected to bring another wave of relief to embattled motorists’ wallets, Efficient Group founder and chief economist Dawie Roodt said there is a good chance finance minister Enoch Godongwana will increase fuel levies during his February 2023 speech which will once again put fuel prices on an upwards trend.
“I am sure we will see an increase in the petrol price in March because the finance minister always increases the fuel levy during his February meeting,” said Roodt.
With every litre of fuel currently sold in the country, around 32% goes to taxes and levies, amounting to R6.78/litre as of January 2023.
Industry players have called on the government to review taxes and levies in an effort to lower fuel prices considering the big part they play in costs.
However, government said it will rather be looking at how industry margins are calculated to achieve this goal – despite these only making up 19% of the prices of fuel with roughly half of that going to employee wages.
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