logo
Latest News
Follow
Sunday / 14 July 2024
HomeNewsExpect good things from next week’s petrol price changes

Expect good things from next week’s petrol price changes

Unaudited fuel price data from the Central Energy Fund (CEF) indicates that the prices of all fuel types in South Africa are dropping on the first Wednesday of April, according to the Automobile Association (AA).

The CEF’s figures show that local petrol prices are looking to decrease by a maximum of 4 cents per litre next week whereas diesel is showing a notable drop of up to 78 cents per litre.

“The expected decreases are good news for consumers, especially considering that mid-month data was indicating possible increases to petrol prices,” said the AA.

Data recorded towards the middle of March predicted a hike of approximately 26 cents per litre for petrol and a drop of a mere 20 to 22 cents per litre for diesel in April.

According to the CEF’s latest numbers, the expected fuel price changes coming into effect next week are as follows:

  • Petrol 93 – Decrease of 4 cents a litre
  • Petrol 95 – Decrease of 2 cents a litre
  • Diesel 0.05% – Decrease of 78 cents a litre
  • Diesel 0.005% – Decrease of 78 cents a litre

It must be noted that these changes do not account for potential alterations in margins, levies, or zone differentials which will be considered when the official adjustments are calculated at month-end.

Why the change in expectations?

The main driver behind April’s expected fuel price decreases is a drop in international petroleum product costs over the course of March, while the average rand/US dollar exchange rate is having an adverse effect on these welcome developments.

“The weaker Rand is eroding around 40c/l of the decreases meaning the decreases could have been more significant had the Rand been stronger throughout March,” said the AA.

“The good news, though, is that 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 drop in diesel prices will provide much-needed relief to the manufacturing, mining, and agricultural sectors where the commodity is a major input factor, which could assist in slowing the rise in costs of goods and services in the country.

More good news is that the two main levies on fuel, the General Fuel Levy and the Road Accident Fund levy, will not be increased 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 that this will not happen this year,” said the AA.

“Although 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 adjustment of fuel prices in South Africa will take place next week Wednesday, 5 April, with the official changes to be gazetted by the Department of Energy before then.

Show comments