“Massive fuel price reductions expected for December” says the AA
However, the Automobile Association (AA) says not all of these decreases will make it through to the motorist due to levies
POLOKWANE – While motorists will be happier with a reduction in the price of fuel, the AA says prices could be tempered by adjustments in the retail and wholesale margin as well as the possible continued use of the Slate Levy.
According to the AA’s unaudited month-end fuel price data released by the Central Energy Fund (CEF), petrol is likely to decrease by R1.85 per litre;Â diesel by R1.40 and illuminating parrafin by R1.28.
These expected drops will cause fuel prices to return to levels last seen around the middle of 2018.
“These massive decreases stem from a combination of substantial retreats in international petroleum prices and a slightly firmer Rand, which has trended stronger against the US dollar.”
However, the Association says it is possible that not all of these decreases will make it through to the motorist.
“April, September and November saw adjustments to various levies which are included in the fuel price structure. The December adjustment relates amongst others to wholesale and retail margins, which could lop off some of the decrease. Last year’s adjustments to these figures was under five cents a litre,” says the AA.
The state levy, which may or may not be retained is also an issue as it is used to claw back losses from fuel price under-recoveries.
“If the Slate Levy has brought the slate balance below the threshold by the end of November, it’s likely it will be zeroed. If not, a further Slate Levy will be applicable for December, which will offset some of the fuel price decrease,” comments the AA
The Association says, however, that motorists are still in for a substantial drop and that the outlook for fuel pricing into 2019 remains cloudy, but they are hopeful that some stability will return
