It’s been a rough month, but, mercifully, there’s a silver lining to be found on some fronts. South African motorists have enjoyed a good run of price deductions at the pumps lately, and this trend looks set to continue into the month of April.
According to the Automobile Association (AA), commenting on unaudited mid-month fuel price data released from the Central Energy Fund, the rand’s weak showing against the US dollar of late has been undone by the huge retreat in international petroleum prices, and a massive price deduction is all but certain.
“As the spread of the Covid-19 virus accelerates across the globe, world financial markets have plunged, with capital fleeing to safe-haven assets. The rand has been sharply weaker against the dollar on this trend,” said the AA.
As the Covid-19 virus continues to run rampant across the world, wreaking devastation upon trade and manufacturing, the global demand for oil has seen a dramatic decline and has, essentially, led to the drop in price. Reportedly, such an abrupt drop in the price of oil hasn’t occurred since the first Gulf War, some three decades ago.
“There is little indication of what the final picture of Covid-19 spread will be, nor where the rand will stabilise against the dollar. It can also not be predicted how long the Saudis are prepared to hold out in their oil price war, since their oil industry is believed to be able to maintain profitability at substantially lower per-barrel prices than the current level.”
The AA added that it will take quite some time for the global economy to get back on an even keel after the current ongoing events, but, at least the next two or three months seem set to provide some fuel price relief to hard-pressed motorists.
Let’s take a look at the predictions for the month of April.
Though the current data looks promising, showing that the price of petrol could drop by up to R1.11 per litre, and the price of diesel and paraffin by up to R1.18 per litre, we have to remember that the increase to the fuel levies will finally come into effect this April, as well.
Thankfully, with the 25c increase to the levies taken into account, South Africans could still enjoy a very welcome price decrease of around 86c / 85c per litre of petrol / diesel, respectively.
The levies are not applied to illuminating paraffin.
Here’s how the fuel prices are shaping up for the month of April:
And in other news, trade federation, Cosatu, has also renewed the call for the introduction of a petrol price cap. This idea had been floated way back in October of 2018, but gained little to no traction in government at all.
Last year, a spokesperson for the Department of Energy stated that the fuel cap was still on the cards, and that the draft report was being discussed internally. The government, however, is yet to release any research report on the matter.
So, we’ll have to wait and see what comes of it.
Until then, stay safe out there, folks, and enjoy the affordable fuel while it lasts.
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