Further fuel price cuts on the cards

Reading Time: 2 minutes

Motorists can expect further decreases in the price of fuel in the coming months on the back of lower global oil prices. South Africans endured steep fuel price hikes from the beginning of the year until the R2.40 cut that came this month.

While international oil prices have steadied below the 100 dollars per barrel mark, the volatile rand remains a risk. The price of a litre of petrol still costs R3.77 more than it did in January.

With the price of oil trading below 100 US dollars per barrel and the expected dip in global demand, fuel prices could be pushed lower, but petrol prices are not expected to go below R21 a litre.

While it’s still early in the month, analysts say the petrol price looks set to go down by about R1.50 next month while diesel will likely increase by about 65 cents per litre.

The Department of Mineral Resources and Energy says it buys 50% of oil from African countries, Angola and Nigeria. But this does not lead to any savings as the Organisation of Petroleum Exporting Countries (OPEC) sets international prices.

Fuel price set to decrease on Wednesday:

The Department says the South African petroleum industry is not ready for deregulation because of the lack of transformation in the sector.

The costs consumers pay per litre of petrol include the cost of the fuel itself, shipping costs, insurance, the local levies applicable in South Africa and the industry margins.