On Monday, A possible price drop of R2.60 per litre for 95 unleaded petrol was indicated by the Automobile Association of South Africa (AA) as well as a R2.45 per litre drop for 93 unleaded.
BusinessTech reports that following mid-month data from the Central Energy Fund (CEF), motorists may be in for some more relief with September seeing the following fuel price adjustments next month:
- Petrol 93 – Decrease of R2.44 per litre
- Petrol 95 – Decrease of R2.60 per litre
- Diesel 0.05% – Decrease of R2.30 per litre
- Diesel 0.005% – Decrease of R2.25 per litre
- Illuminating Paraffin – Decrease of R1.93 per litre
The Department of Energy warns that these anticipated changes are unaudited and may be subjected to potential shifts after the country’s retail margin and slate levy adjustments are taken into consideration at the end of the month.
Two main factors that impact our fuel price fluctuations are the rand/dollar exchange rate and the global price of petroleum products, significantly driven by oil prices.
Even with the predicted price drops though, South Africa’s fuel prices are still much higher now than in February before the impact of the Russia-Ukraine conflict hit the global markets.
According to IOL, this year’s oil price soared to its highest since 2008, climbing above $139 a barrel in March after severe sanctions were imposed on Russia by Western countries over its invasion of Ukraine.
Subsequent easing of global oil prices followed weak manufacturing data in major economies which highlighted a global economic downturn.
The US economy has entered a technical recession since and the rand has regained some purchasing power against the US dollar throughout the start of the month, sitting around R16.20/dollar on Friday, 12 August.
Thus far, the relatively stronger rand contributes to a reduction of up to 25 and 28 cents per litre for the prices of petrol and diesel, respectively.
However, South Africa’s currency is acutely sensitive to macroeconomic factors and as such, any shifts in broader market conditions could see the rand fluctuate again and wipe out its recent gains.
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