By: Natasha Archary
The Automobile Association of South Africa (AA) says motorists can expect some relief at the pumps this September with prices of all grades of fuel set to drop from Wednesday 1 September.
Predictions for the September decrease in fuel is expected at 11 cents a litre for petrol, 21 cents a litre for diesel and around 12 cents a litre for illuminating paraffin.
“International petroleum prices continued their gradual retreat during August, having pulled back by around 10% since the start of the month. We attribute this mainly to the Organization of Petroleum Exporting Countries (OPEC) cartel, which increased oil production gradually during the first half until previous production restrictions were removed,” the Association says.
The AA notes, however, that the Rand weakened a fair amount against the US dollar in August, meaning that South African fuel users will not enjoy the whole benefit of the lower oil price.
The Association says it is concerned about the trajectory of the Rand, whose average exchange rate against the US dollar has weakened considerably since July 6. The Rand slid from around R14.32 on that day to over R14.70, with daily highs peaking in excess of R15.30.
Motorists relief at the pumps may therefore be short-lived if the Rand continues to weaken against the dollar.
— AA South Africa (@AASouthAfrica) August 30, 2021
Fuel prices are officially calculated and adjusted on the first Wednesday of every month by the Department of Mineral Resources and Energy. The DMRE is the only entity that regulates, sets, and adjusts fuel prices in South Africa.