Fuel price relief is on the cards
THE price of petrol could go down by 50 cents a litre early next month.
But this depend on the strength of the rand and the international fuel price.
Last week Minister of Energy Dipuo Peters hinted that South Africa could have a fuel price decrease at the end of the month.
At the beginning of May the price of all grades of petrol went up by 28 cents a litre, which led to the price of unleaded petrol rocketing to R12,22 inland and R11,87 in coastal areas.
In April petrol went up by 71 cents a litre because of fuel levies, Road Accident Fund contributions and pipeline tariffs. These rises forced many taxi associations across the country to up their fares, putting commuters under severe financial strain.
But Muzi Mkhize, chief director of hydrocarbons in the Department of Energy, said there could be some good news.
Mkhize said the department was monitoring the international product price movement and the exchange rate.
"Those two are the main determinant factors," he said. "As you know with the situation in Europe, Greece and also the softening a little bit around the issues of sanctions in Iran. All these have resulted in international product prices softening.
"But from our side, our exchange rate has not done that well. We are sitting with an exchange rate of about R8,04 (to the US dollar) so that is a challenge," he said.
Mkhize added that the department would "generally" not engage in speculation about the fuel price.
"But because of where we are coming from it was essential that the minister makes it clear to the people to say what is happening to the price.
He indicated that things were looking good on international product prices as well as the exchange rate," Mkhize said.
He said South Africa's fuel prices were in an over-recovery position, which meant that "we can be able to then get decreases at the end of the month".
"As things stand you are talking around 24 cents for diesel and 52 cents for petrol," Mkhize said.
He said a decrease would be caused by the positive movements in the international product prices.
"If there are positive changes in the exchange rate ... if the situation stays the same we are going to have decreases for sure," Mkhize added.
He said the situation in Iran - where the US imposed sanctions on the country and forced others to follow suit - had also affected the general fuel price increase in the country. - email@example.com