Home South African Petrol price decrease of more than R1 looking likely for August

Petrol price decrease of more than R1 looking likely for August

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Lower oil prices will bring some relief at the pumps next month. Here’s the outlook based on current unaudited data:

File picture: CarGurus/Newspress

NOT THAT it’s much consolation to motorists who are overburdened with record fuel prices, but the sums are pointing towards price decreases for petrol and diesel in August.

We’re about a week away from an official announcement and the rand-to-oil-price interactions in the coming week will have a bearing on the final prices, but current data is pointing towards price reductions of more than R1 a litre for both grades of petrol.

According to unaudited data released by the Central Energy Fund on July 26, the over-recovery for the month points to a decrease of around R1.89 for 95 Unleaded. Unfortunately, what’s left of the ‘fuel tax holiday’ is set to fall away next month, theoretically reducing the decrease to R1.14.

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On the upside, lower oil prices have been pushing the average over-recovery up by more than 10 cents a day lately, so it’s not impossible that we might see a price decrease of closer to R1.40 for petrol if the rand and international oil prices behave themselves between now and Friday.

The diesel data for 50ppm is pointing towards a decrease of around R1.52, which would drop to 77 cents once the general fuel levy was reinstated, but if oil prices stay at their current level, then we could be looking at a decrease of closer to R1.

Keep in mind, however, that none of this is set in stone and we’ll only know the full extent of the coming price decrease when the Department of Energy releases its fuel price statement early next week, ahead of the price decrease on Wednesday, July 3.

Either way, the Automobile Association has cautioned that any fuel price cuts would not have an immediate effect on inflation.

“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,” the AA said.

“We stand by our call that a review of the fuel price structure, and an audit of the components that comprise the fuel price, is essential and long overdue to offer sustainable solutions that mitigate against rising fuel costs in the country,” the association added.

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