As expected for the past two weeks, the latest data from the Central Energy Fund (CEF) points to a decrease in fuel prices for the month of September, the Automobile Association (AA) said on Friday.
The association said that despite recent rand weakness against the US dollar, the average exchange rate against the US currency is still favourable and fuel in the country is still expected to decrease significantly when adjusted next week.
The AA says current unaudited data from the CEF is indicating significant reductions to fuel prices across the board, but specifically to the prices of petrol.
According to the CEF’s figures, ULP95 petrol is expected to be lower by around R2.35/l while ULP93 is set for a drop of around R2.18/l.
Diesel is expected to drop by between 77 and 87 cents/l while illuminating paraffin will drop by around 82c/l.
“These decreases are certainly welcome and will provide some relief to motorists. Considering the expected decrease to ULP95, for instance, the price for this fuel will drop from its current R25.42/l to R23.07/l. This is cheaper than the June price of R24.17/l but still significantly higher than R21.84/l May pricing. It is also way off the January pricing of R19.61/l. Nevertheless, any decrease to fuel prices is good news,” the AA said in a statement.
The downward movement in international product prices, oil prices, are the main driver behind the expected decreases contributing 94% to the projected reductions.
The average rand/US dollar exchange is playing a smaller role but is still contributing the expected decreases.
“Although we are expecting fuel to be cheaper in September, we remain concerned about the overall high prices which impact on all consumers. The price hikes in June and July will continue to impact the economy, and on the financial situation of all South Africans. A sustainable solution to mitigating rising fuel costs is still necessary and until that solution is found, citizens will be at the mercy of fuel price hikes,” the Association further stated.
The AA said it again calls on government to urgently initiate a transparent review of the fuel price to seek these answers.
“It stands by its earlier position that scrapping the General Fuel Levy (GFL) is not the solution,” the AA said.
“We note the calls by those who say this is a way of reducing the fuel price but in our view this will not solve the problem; it will simply force government to find alternative ways to collect the revenue generated by this tax. Instead, the structure and composition of the fuel price must be considered, along with a deeper interrogation of how government currently allocates its funds,” the AA said.
Fuel prices are usually adjusted on the first Wednesday of a month and determined by the price of oil and the rand-dollar exchange rate.
BUSINESS REPORT