Fuel price drop forecast but relief may be short-lived

MOTORISTS can start looking forward to some relief at the pumps as fuel prices are predicted to decrease again at months-end.

Thanks to declining international oil prices, data suggests a petrol price decline of around 28c/litre, 36c for diesel and 21c for illuminating paraffin.

Commenting on unaudited mid-month data released by the Central Energy Fund, the Automobile Association (AA) said a strengthening Rand has also contributed to taking pressure off fuel prices.

‘International oil prices have been declining steeply since the start of February and this factor has accounted for approximately half of the petrol price reduction and more than two-thirds of the diesel price reduction.’

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However, the AA said this is by no means an indication that the South African economy is out of the woods.

‘The state is facing enormous losses owing to tax under-collections, mismanagement at state-owned enterprises, and a rising debt burden.’

The AA also said that the country is on notice for further credit ratings downgrades which could be triggered following the budget speech, should the numbers come in below expectations.

‘We advise motorists to be extremely prudent and not bank on ongoing fuel price declines in the medium term.’

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