The Automobile Association (AA) said that despite the recent weakness in the local currency, South Africans can still expect a sizeable reduction in fuel prices next week.
“Current unaudited data from the Central Energy Fund (CEF) is indicating significant reductions to fuel prices across the board, but specifically to the prices of petrol,” said the AA.
As the situation stands, Petrol 95 is expected to go down by around R2.35 per litre on the first Wednesday of September while Petrol 93 is set for a drop of R2.18 per litre.
Diesel owners can also expect relief at the pumps as current data shows a drop of between 77 to 87 cents per litre for this fuel type next week.
“Considering the expected decrease to ULP95, for instance, the price for this fuel will drop from its current R25.42/l to R23.07/l,” said the AA.
“This is cheaper than the June price of R24.17/l but still significantly higher than R21.84/l May pricing. It is also way off the January pricing of R19.61/l.”
Call to review petrol price calculation
The hopeful decrease in local fuel prices in September largely comes off the back of a downward trend in international oil prices during the month of August, which contributed around 94% of the expected reductions.
The average Rand/US dollar exchange is playing a smaller role, but still had a positive effect on the overall anticipated decreases, said the organisation.
“Although we are expecting fuel to be cheaper in September, we remain concerned about the overall high prices which impact all consumers,” said the AA.
“The price hikes in June and July will continue to impact the economy, and on the financial situation of all South Africans. A sustainable solution to mitigating rising fuel costs is still necessary and until that solution is found, citizens will be at the mercy of fuel price hikes.”
The AA insists the South African government initiate a transparent review of the country’s fuel price calculation to find this solution, as scrapping the General Fuel Levy will not yield the intended results, it said.
“We note the calls by those who say this is a way of reducing the fuel price, but in our view, this will not solve the problem; it will simply force government to find alternative ways to collect the revenue generated by this tax,” said the organisation.
“Instead, the structure and composition of the fuel price must be considered, along with a deeper interrogation of how government currently allocates its funds.”