South African motorists have more reasons to celebrate as fuel prices are set to decrease in September, marking the fourth consecutive month of price drops. This comes alongside news of consumer inflation hitting a three-year low, providing some much-needed relief to consumers.
According to unaudited data from the Central Energy Fund, the price of 95 unleaded petrol (ULP) is expected to drop by around 94 cents per litre, while 93 ULP will see a reduction of about 86 cents per litre. Diesel prices are anticipated to decrease by approximately 76 cents per litre, and the cost of illuminating paraffin is set to fall by nearly R1.01 per litre.
These reductions are more significant than the Automobile Association’s (AA) earlier mid-month forecasts, which predicted decreases of 68 cents per litre for 95 ULP, 63 cents per litre for 93 ULP, 52 cents per litre for diesel, and 78 cents per litre for illuminating paraffin.
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“The reason for this welcome news is the perfect combination of a strengthening rand against the US dollar since mid-August and significantly lower international oil prices, which dipped in mid-August and increased the over-recovery on fuel prices during the period under review,” the AA explained.
If these predicted decreases are realised, the cumulative impact of the past four months of fuel price reductions will be considerable. For example, the price of 93 ULP inland will have decreased by about R2.44 per litre over this period, resulting in a saving of roughly R122 on a 50-litre petrol tank.
However, alongside these decreases, consumers should be aware of a slight increase in the fuel retail margin. Mineral and Petroleum Resources Minister Gwede Mantashe has approved a 5 cent per litre increase to the fuel retail margin, effective from September. While this may slightly offset the total reduction, the impact will be minimal.
“Lower fuel prices are good news for all consumers. Apart from the immediate benefit of buying cheaper fuel, reduced fuel costs also lower input costs across various sectors,” the AA stated.
“In a time when most South Africans are still struggling to make ends meet, this is welcome news for all,” the association added.
