Festive fuel alert: Double trouble for December petrol prices?

Adjustments to industry margins might turn out to be the Grinch at the petrol pumps come this Wednesday when the Department of Minerals and Petroleum Resources’ official fuel price adjustments for December come into play.

Preliminary data released by the Central Energy Fund (CEF) for December fuel prices are currently pointing to a small cut of around 7 cents a litre for 93 Unleaded petrol, and a slight increase of 3 cents a litre for 95 Unleaded.

No ‘fuel good’ for petrol prices?

On Monday, the Automobile Association (AA), however, cautioned that adjustments to industry margins could see the prices of both grades of petrol increase for the period.

This because the Regulatory Accounting System (RAS) – the guideline for the fuel industry that determines margins for petrol at wholesale, retail, and secondary storage and distribution levels – could offset any gains and add to under-recoveries for petrol prices.

The full impact of the RAS adjustments on petrol and diesel prices will only be known when the department makes its official fuel adjustment announcement this week.

AA spokesperson, Eleanor Mavimbela says apart from the margin adjustments, the mixed outlook for fuel prices can be attributed to fluctuations in the international product prices of unleaded fuel since mid-November.

Additionally, the depreciation of the rand against the US dollar at the beginning of the month has added to the under-recovery (or increase) of fuel prices. 

Mavimbela emphasised that the projected increases in diesel prices will have negative consequences for all consumers because higher input costs are likely to lead to increased prices at stores.

“It’s probable that the annual margin adjustments could also have a negative impact on the expected increase of around 48c/litre to diesel, also pushing this fuel price higher. The expected increase of around 43c/litre for illuminating paraffin will also not come as good news for users of this fuel in December,” she said.

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Fuel-saving strategies

Mavimbela said that while motorists’ festive spirit will be dampened by increases, they are unlikely to result in major changes to holiday travel plans of those embarking on long journeys.

“We urge consumers to monitor their fuel usage closely and to budget according to the new fuel prices, which will take effect at midnight, Tuesday 3 December.

“Ensuring vehicles are well-maintained, carefully planning routes, and avoiding heavy traffic whenever possible are some strategies that motorists can use to improve fuel consumption,” the association’s spokesperson said in conclusion.

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