A stronger average Rand/ US Dollar exchange rate in May and lower international product prices are driving local fuel pricing downward, and South Africans can expect good news when official fuel data is adjusted for June.
The Automobile Association (AA) said unaudited data from the Central Energy Fund (CEF) indicates significant fuel price decreases for June, which will bring welcome relief to all consumers who have seen prices increase steadily since February.
“In mid-May, we forecast humble decreases of around 61c/l for 95ULP and 63c/l for 93ULP. However, the favourable environment of lower international product prices is being assisted by a stronger Rand to US Dollar exchange rate, and this has augmented our earlier outlook. Based on the latest CEF data, petrol is now set to decrease by around R1.06/l for both 95ULP and 93ULP, diesel by around R1/l, and illuminating paraffin by around 80c/l,” said the AA.
In January, a litre of 95ULP in Gauteng cost R22.49, R3 less than compared to the cost in May. The same fuel at the coast cost R21.77/l in January, R2.93 cheaper than its current cost of R24.70.
“While the decreases will bring relief, the cost of fuel is still higher now than it was just a few short months ago, and again points to the financial pressure many South Africans still experience,” said the Association.
The Association added that changes to this data are likely before the formal adjustment by the Department of Mineral Resources and Energy (DMRE) soon but that it still expects substantial fuel price decreases across the board this month.
“High fuel costs and interest rates are still strangling many South Africans – especially those with debt – and any positive development will be well received. However, it remains necessary that the fuel pricing mechanism is reviewed to determine if any factors can be permanently revised to mitigate against rising fuel costs in future. This is a call we have been making to government since 2018, and the longer it takes to do so, the longer South Africans will bear the brunt of any fluctuations in the factors that influence the fuel price.
“Consumers are embattled, and it is incumbent upon the government to find ways to deal with this situation. As we have also said many times before, civil society organisations such as ours stand ready to work with the government on finding solutions that benefit all citizens, and we believe it is long overdue that government accepts this invitation for collaboration,” said the AA.
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