Fuel prices are set for a substantial drop at the beginning of September.
According to the Department of Energy, the decrease in the prices of all the petroleum products is due mainly to the continued drop in the crude oil prices during the period under review.
“The price of Brent crude dropped to about USD46.93 per barrel (on average) due mainly to global supply glut (oversupply),” said the department.
However, Automobile Association (AA) said motorists should be alert to the underlying fundamentals.
“Petrol is set for a drop of between 71 and 77 cents a litre, diesel will be lower by 50 to 53 cents, and illuminating paraffin down by about 56 cents,” said the association.
“But the rand’s weakness against the US dollar has been expensive for motorists, fuel prices would have dropped by an additional 25 cents a litre if our currency had remained at its late-July levels.”
The association said the international petroleum prices have recently reached six-year lows.
The AA also expressed concern over what trajectory the oil price might take when it reaches the bottom of the cycle.
“If and when the oil price flattens out, or increases, motorists will be fully exposed to any rand weakness,”said the association.
The Department of Energy informed that the pricing schedule for all the pricing zones will be released on 1 September.
