While the recent political changes have inspired a more jubilant mood among many South Africans, motorists will have even more reason to smile at the beginning of March, with current data indicating that a fuel price reduction is on the cards.
Mid-month data is pointing towards a petrol price decrease of around 30 cents a litre while the cost of diesel is likely to fall by approximately 40 cents and illuminating paraffin by 21 cents.
This would bring the price of 95 Unleaded down to R13.82 in Gauteng and R13.33 at the coast.
However, current trends indicate that an even bigger decrease is possible – depending on how oil prices and the currency play along between now and the end of the month.
The most recent ‘daily’ reports from the Department of Energy are showing ‘over recovery’ price calculations that exceed 50 cents a litre, with the month’s average so far pointing to a 31 cent decrease, while diesel’s daily prices have been over 67 cents in the green recently, with the month’s average currently at 42c.
According to the Automobile Association, international oil prices have been declining steeply since the beginning of February, accounting for around half of the petrol price reduction and more than two thirds of the diesel over-recovery. The rest is due to the strong rand, which has been trading below the R12 to the dollar mark.
“The resignation of Jacob Zuma as president of South Africa caused some strengthening of the rand, and we expect this to have additional impact on the fuel price before month-end,” the AA said.
“However, this does not mean the economy is out of the woods. The state is facing enormous losses due to tax under-collections, mis-management at state-owned enterprises, and a rising debt burden,” the association added.
“The country is also on notice for a further credit rating downgrade, which might be triggered after next week’s Budget if the numbers come in behind expectations. We advise motorists to be extremely prudent and not bank on ongoing fuel price declines in the medium term.”