Fuel prices look set to come down again in September, with the latest data showing a strong over-recovery for both petrol and diesel.
According to mid-month data released by the Central Energy Fund (CEF) a petrol price decrease of between 65 cents (93 Unleaded) and 70 cents (95 Unleaded) is looking likely, while diesel could come down by 53 cents (500ppm) and 50 cents (500ppm) respectively.
These predicted price cuts could bring petrol prices to just below where they were in January 2024, with 95 Unleaded dropping to around R21.62 at the coast and R22.41 inland, where 93 would recede to around R22.06.
However, this outlook depends on international oil prices remaining below the $80 (R1,424) to the barrel mark and continued rand strength. Any deviations from the current path could result in lower-than-expected decreases next month.
Oil has been volatile this month, after US recession fears sent prices plunging to around $76 earlier in the month, but positive inflation data has since led to a recovery. Brent Crude oil was trading at $79.68 per barrel on August 19.
The improved international economic sentiment has caused the South African rand to rally, trading at $17.80 to the US dollar on August 19, well down from its July average of R18.23.
As lower fuel prices help keep a lid on general inflation, it would certainly benefit South Africa’s economy if the current decrease trajectory continued for longer, the Automobile Association said.
“Naturally, this is welcome news for all South Africans and will certainly alleviate pressure on many households. However, the drop in fuel prices must not negate the need for a review of administered prices, including of the fuel price formula, which was announced in July by President Ramaphosa,” the AA said.
“We again call for this review to happen with urgency in the interests of finding long-term ways of mitigating fuel price hikes in the future,” the association concluded.
The next fuel price adjustment in South Africa will take place on Wednesday, September 4.
2024 has seen some erratic fuel price adjustments, with petrol increasing by nearly R3 between January and May, before decreasing again in June, July and August.
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