All indications are that the price of diesel and paraffin will drop significantly next month and that even petrol consumers can expect some relief, the Automobile Association said on Friday. The AA bases its forecasts on unaudited data from the Central Energy Fund.
The AA says the latest expectation is excellent news for consumers, as figures earlier this month indicated that the price of petrol could potentially rise by around 25 cents per litre. Diesel and paraffin prices also earlier looked like they would fall much less than now expected.
The price of 95 octane petrol and 93 octane petrol is expected to drop by 1.5 cents and 4 cents per litre, respectively.
The price of diesel is expected to be about 78 cents per liter cheaper next month. The price of paraffin is expected to drop by R1.39 per litre.
“The main driver behind the declines is lower international product prices, but the higher than average exchange rate of the rand and dollar balances out these gains,” says the AA.
“Decreases of around 40 cents per liter for fuel have been wiped out by the weak rand. The expected declines would have been greater if the rand had been stronger throughout March.”
However, the expectation is exactly that: just an expectation, says the AA.
The organization warns that other factors, such as the costs associated with the transport of fuel to the interior, as well as adjustments to the balance fund levy by the department of mineral resources and energy, will also have an effect on the final fuel price.
“However, the good news is that if adjustments are made to transport costs and the balance fund levy, petrol prices are unlikely to rise significantly. The price of diesel and paraffin will also continue to fall,” says the AA.
“The drop in diesel prices is particularly important because it is a major input cost in the manufacturing, mining and agricultural sectors, and a drop prevents an immediate rise in the cost of goods and services.”
Despite the uncertainty about the possible increase in the balance fund levy, the general fuel levy and the Road Accident Fund’s levy will not be increased this year.
“These levies are traditionally increased in April, but the finance minister has responded to calls not to increase them. Although it is not a saving as such, any increases would have put additional pressure on fuel prices.”
The official adjustments to the fuel prices come into effect on 5 April.
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