Following two consecutive months of substantial fuel decreases, the tide appears to be turning, and South Africans can expect minor relief at the pumps in petrol prices, and slight increases in diesel and paraffin prices in August. According to the Automobile Association (AA), current unaudited data from the Central Energy Fund (CEF) indicates these trends at mid-month, but these trends are likely to change as the month progresses.
The current numbers show 95 ULP down by around R0.07/litre, 93 ULP down by around R0.04/litre, and the wholesale price of diesel down by around R0.01/litre. Illuminating paraffin is set for an increase of around R0.06/litre.
“It’s important to remember that this is mid-month data and that the price outlook may still change drastically over the next two weeks before the official August adjustment is made, especially since the data is edging so close to revealing a different trajectory,” notes the AA.
The AA says sharp increases in international product prices from the middle of June are pushing towards an under-recovery for all fuel prices. However, the Rand/US dollar exchange rate is assisting to buffer against a bigger increase for diesel and illuminating paraffin, bringing forward a nominal decrease for both 95 and 93 ULP.
The AA further notes that despite the forecast decreases in petrol prices, fuel prices in South Africa remain high and that previous significant increases will still impact the economy in the coming months.
“Decreases offer immediate relief at the pumps, but those sectors affected by them don’t immediately adjust their prices downward, and instead wait for more consistent fuel cuts that lower their input costs over time. We stand by our call that a review of the fuel price structure, and an audit of the components that comprise the fuel price, is essential, and long overdue, to offer sustainable solutions that mitigate against rising fuel costs in the country,” concludes the AA.
