There could be good news at the pumps for South African motorists in the new year, with significant price drops for fuel expected next week. That is according to leaked data from the Central Energy Fund (CEF) provided to Netwerk24.
Wednesday’s data showed that a decrease of between 73 cents and 76 cents, depending on fuel type. That is despite an 8.7% increase in Brent crude oil price and the rand’s continued weakening against the US dollar.
While the price of oil largely determines the petrol price, the government buys a mix of fuels from overseas, and as it stands, it appears that this amount will indeed be cheaper. The decreases could have been around 29 cents more had the rand remained at its previous average level.
The average price rand-dollar exchange rate was around R15.74 between 26 November and 29 December compared to the R15.39 it traded at the month before. One factor that might change the equation is the slate levy, which is used to compensate the industry for any under-recovery in fuel sales due to the buying price of fuel changing during the month.
It could bring even more significant price cuts if the government lowers the slate levy from its current level of 41.66 cents per litre. However, the balance it needed to recover was around R4.7 billion in October 2021.
The reduction could come as a great relief for holidaymakers that plan to return home from next week, Wednesday, 5 January 2022, when the monthly price change will take effect. Motorists in the country have been paying more than ever for fuel in the last few months, with prices hitting record levels of over R20 inland for both 95 and 93 unleaded petrol in December. The wholesale price of diesel is also at its highest on record.
Netwerk24 had to use leaked information since the energy department decided to stop publishing daily updates to the public on the expected fuel price. That was ostensibly caused by a rift between the department and the Automobile Association of South Africa (AA).
The department has accused the AA of using the expected fuel price increases to further its business interests. The AA previously published a half-month update that forecasted the expected price changes based on the data provided by the CEF.
But the AA has hit back, claiming the decision was not in the public’s best interest, who could use the predictions to budget for their fuel spend in the coming month. The department still provides this information to stakeholders in the fuel industry.
Information courtesy of My Broadband