AA expects only minor relief, if any, at the petrol pumps in August

After two consecutive months of substantial fuel price decreases, the tide appears to be turning and South Africans can expect only minor relief in petrol prices and slight increases to diesel and paraffin prices in August.

According to the Automobile Association (AA), current unaudited data from the Central Energy Fund (CEF) is indicating these trends at mid-month. These trends are, however, likely to change as the month progresses.

The numbers are showing 95ULP down by about 7c/litre, 93ULP down by about 4c/l, and the wholesale price of diesel down by about 1c/l. Illuminating paraffin is set for an increase of about 6c/l.

“It’s important to remember that this is mid-month data and that the price outlook may still change drastically over the next two weeks before the official August adjustment is made, especially since the data is edging so close to revealing a different trajectory,” said the AA.

The association said sharp increases in international product prices from the middle of June are pushing towards an under-recovery for all fuel prices, but the rand/US dollar exchange rate is helping to buffer against a bigger increase for diesel and illuminating paraffin, bringing forward a nominal decrease for both 95 and 93ULP.

Despite the forecast decreases in petrol prices, fuel prices in South Africa remain high and previous significant increases will still affect the economy in the coming months, it said.

“Decreases offer immediate relief at the pumps but those sectors affected by them don’t immediately adjust their prices downwards and instead wait for more consistent fuel cuts that lower their input costs over time.

“We stand by our call that a review of the fuel price structure and an audit of the components that comprise the fuel price are essential and long overdue to offer sustainable solutions that mitigate against rising fuel costs.”