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Tuesday, July 23, 2024

August fuel prices will only drop depending on these ‘big ifs’

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While mid-month data from the Central Energy Fund (CEF) shows that fuel prices could drop come August, for the first time in months, this will only materialise if two important factors allow.

If the rand performs better against the dollar and oil prices stay low between now and the end of the month. Only then will South Africans pay less for fuel in August.

But, the full withdrawal of the government’s interventions may erode the gains as the remaining 75c is expected to be brought back in the same month.

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The government is expected to discontinue the fuel price ‘tax holiday’ on 3 August.

The data, released on 14 July 2022, shows that petrol prices could drop by as 88 cents per litre, while diesel prices may shed off 82 cents per litre. If the government then withdraws the remaining 75c the drop won’t be significant if at all it would exist.

South Africans could only enjoy fuel price cuts if oil prices remain at current levels or lower, the rand strengthens and the government extends its intervention.

Bearing in mind that the CEF unaudited data only provides for speculation of how the prices could turn out, the ifs have to materialise to eventually see the fuel prices drop.

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Read also: DoT wants to train inexperienced truck driver for free

In the absence of a lasting solution to the fuel price crisis, South Africans will hope and pray that all the factors determining the landing price of oil remain stable.

The Automobile Association has called for a review of the fuel price and taxation structure, stating that there is an urgent need to interrogate all components of the fuel price to determine if all components were still necessary and correct.

Earlier this month, the DA said that parliament was busy with the Fuel Prices Deregulation Bill which could see prices of fuel dropping to as low as R17.50 as reported by SA Trucker earlier.

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