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Tuesday, July 16, 2024

Good news for diesel customers, come September 2020

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September fuel prices are likely to bring some good news for those operating diesel vehicles, but for petrol consumers the relief will be negligible.

Trucking companies and farmers will benefit the most as diesel prices always have an effect on how much profit they make in the difficult economic situation they find themselves right now.

According to the Automobile Association, the unaudited month-end data from the Central Energy Fund is pointing towards a diesel price decrease of around 19 cents a litre, while 95 Unleaded petrol looks set to drop by about four cents.

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However, the cheaper 93 octane petrol that’s available in the inland regions is expected to increase in price by six cents a litre.

If the above holds true, a litre of 95 Unleaded petrol will now cost R14.43 at the coast and R15.11 inland, while 93 ULP will rise to R14.94.

The AA explained that the rand is largely to blame for the lack of any real price relief next month.

“The bad news for the month was the rand, which pulled back from testing the R16.80 mark against the US dollar last month and headed towards R17.40 at mid-month, with a slight firming trend since,” the association said.

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“On average, exchange rate losses added around 17 cents a litre to next month’s petrol price. The good news is that a steady performance from international oil prices has offset the rand’s weakness”.

While the rand did pull back below the R17 mark to the dollar towards the end of this month, this happened too late to have any real effect on next month’s petrol prices.

However, international oil prices also made some gains in the last week of the month, which could put the fuel price on the back foot in the weeks to come, the AA warned.

“As the country comes to terms with the economic damage caused by the Covid-19 lockdown, there is also concern about government’s ongoing policy uncertainty and levels of corruption as highlighted by the President,” the AA said.

This, the association said, could mean it takes the local currency longer than it should to recover.

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