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2022-07-27

Petrol price may be cut by more than R1/litre next week

South Africans will be getting some relief at the petrol pumps with fuel price cuts in August, the department of mineral resources and energy confirmed on Wednesday.


Ahmed Areff | News24

According to the latest data from the Central Energy Fund, petrol prices currently look set for cuts of between R1.19 and R1.22 per litre, depending on the grade of fuel. Diesel could be reduced by more than 80c – if the oil price and rand exchange rate remain at current levels. 

 

In July prices were hiked by more than 10%.

The fuel levy reduction, which attempted to cushion consumers from the impact of skyrocketing oil prices, will however be coming to an end on 2 August. The temporary reduction of R1.50 per litre came into effect in April. It was reduced to 75c per litre in July.

"Despite this reprieve coming to an end on 2 August 2022, the department can confirm that there will still be a sizeable reduction in fuel prices including paraffin for South Africans. A formal announcement in this regard will be made by the end of the week," the department said.

The fuel prices are usually adjusted on the first Wednesday of a month

Brent crude is currently at around $104 a barrel, but hit a high of $123 in March, after Russia’s invasion of Ukraine roiled markets.

While the rand crashed through R17 to the dollar earlier in July, it has improved slightly, and is currently hovering around R16.90 to the greenback.

The process of deregulating the price of petrol has also begun, with the department saying on Wednesday that consultation on the introduction of the price cap for 93 Octane fuel has been "initiated."

"This price cap will allow for the fuel suppliers who can pass the benefit to the consumer to do so. No disruptions are expected in the fuel market as 93 Octane accounts for a small portion of the market, however this will allow the department to monitor how the market will react to the capping of the price."

Business Insider reported last week that Mineral Resources and Energy Minister Gwede Mantashe published a brief notice on page 106 of the weekly Government Gazette, asking for comment on the proposed cap. 

This kicked off a 30-day period for public input.  


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