Consumers in South Africa will be able to stretch their rands a little further this month after the fuel price decreases were announced this past week.
The Department of Mineral Resources and Energy (DMRE) dropped the prices of both grades of petrol by 92 cents per litre, while diesel came down by between 79 cents (500ppm) and R1.05 (50ppm).
This means that a litre of 95 Unleaded petrol costs R21.40 at the coast and R22.19 in Gauteng, and the cheaper 93 Unleaded is retailing at R21.79.
This is the lowest level of petrol prices since February 2023.
The DMRE said September’s petrol and diesel price decreases come mostly as a result of lower international fuel prices, while a slightly stronger South African rand added around 11 cents to the equation.
Henry van der Merwe, the chairman of South African Petroleum Retailers Association (SAPRA), said, “This is the fourth consecutive month we have seen a decrease with prices continuing to reflect the rand’s growing strength throughout August against the US Dollar during the period under review as well as the much lower oil price. The price of 95 petrol has in fact decreased by R3,30 from May – September. The global oil price has proven more balanced in August, despite its own market fluctuations.”
“Fluctuating fuel costs impact every sector of society as they directly translate into higher/lower operational costs for businesses and impact the cost of living for consumers. Small businesses are often hardest hit when fuel goes up, as are commuters. The relief in the form of a decrease in fuel costs is therefore tremendous news again this month for struggling commuters and small businesses,” he further added.
Van der Merwe said he agreed with analyst commentary, which is cautiously optimistic about fuel prices remaining stable in the short term however he does caution motorists to keep a firm eye on prices and continue to consider fuel-efficient practices to buffer against any future increases.
Abigail Moyo, the spokesperson of the trade union UASA, said, “The price drop, combined with the inflation rate of 4.6% moving closer to the SA Reserve Bank’s target level of 4.5%, signals hope for further inflation ease and a much-anticipated interest rate cut by the South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) at its next meeting on 19 September 2024.”
“UASA is pleased with the financial relief and hopes the trend continues to bring relief to workers during the remainder of the year,” Moyo further said.
Meanwhile, Neil Roets, the CEO of Debt Rescue, said it is difficult to rejoice in saving a few hundred rands per month on petrol or transport costs when millions of citizens are trapped in daily misery and hunger, with no hope of crossing the poverty line.
Roets said, “National Assembly recently passed the 2024 Appropriation Bill, which will increase social transfers by nearly R50 billion to over R300 billion for the year, with unemployment now at 33.5%, the highest it’s been in two years, surely we should be allocating these billions to creating work opportunities so that more people can join the workforce and contribute to the tax base in the country?”
“Even those surviving below or on the upper-bound poverty line of R1,634 are unable to buy anywhere near the amount of nutritional food needed to stay strong and healthy. Should this not be a top priority for the country’s leaders and food retailers right now?” he said.
Hayley Parry, Money Coach and Facilitator at 1life’s Truth About Money, said it has been a while since we had some good news.
Parry told Business Report, “I would urge consumers to use this savings as an opportunity to put in some good money management habits when you make small changes you can be amazed at how it can have an impact on your long term finances. If you have not yet prioritised making a profit from your salary each month, use the fuel price decrease as an opportunity to do so. You want to figure out how you can automate transferrng the profit you make from your salary away from your everyday bank account that you use.”
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Brina Biggs, a senior manager at Budget Insurance, said, “On an average tank, your savings will be close to R50 per tank, and with the MPC meeting later this month, it could be further relief for owners of debt with car or home loan, so spring does not only bring warmer weather, but some relief to your bank patterns. It has been a tough couple of years with the high cost of living, but the light at the end of the dark tunnel is near, so hold out, continue with your budget, and use some of the relief to continue settling debt so that you can quash your debt and budget away expensive days.”
BUSINESS REPORT