Massive fuel price drop expected next week
The figures forecast for the month of May will bring the price of petrol and other fuels to levels last seen five years ago
WITH international oil prices on a downward spiral, motorists could be in for more much-needed relief at the pumps as early as next week.
According to the Automobile Association (AA), the price of petrol is expected to decrease by around R1.74 a litre, with diesel dropping by R1.56 and illuminating paraffin by a whopping R2.18 per litre.
‘Seen in context, the predicted decreases will mean an overall drop of R3.84 a litre for 93 octane unleaded petrol inland since January, and R4.00 for 95 octane petrol over the same period.
‘Diesel users are also benefiting significantly, with the predicted price meaning a R3.49 a litre saving compared to what it was five months ago,’ the AA said.
The AA, commenting on unaudited month-end data released by the Central Energy Fund, said the disastrous performance of the rand versus the US dollar during April ‘barely moved the needle on local fuel prices’.
‘The rand has been pummeled by Covid-19 and the Moody’s downgrade to junk status, and yet we are still able to predict record fuel price drops.
‘This goes to show just how severely the world oil price has collapsed,’ the AA said.
The petrol price was last below R13 a litre in July 2017, and in March 2016 petrol cost R11.74 a litre with the price rising to R12.62 one month later.
The figures forecast for this month will bring the price of petrol and other fuels to levels last seen five years ago.
‘With the massive drop in fuel usage during April, revenue from the general fuel levy, which comprises about 25% of every litre of fuel – will also suffer.
‘Considering the annual collection rate of the levy, government will have lost between R6-billion and R7-billion in revenue through not collecting this tax,’ the AA said.
The association believes many retailers will struggle to stay viable going forward, owing to the sudden drop in fuel purchases.
‘If the ongoing oversupply forces world oil prices further downwards, we might see at-the-pump fuel costs decline to levels last seen a decade ago or longer.
‘But if demand suddenly increases, the reverse could also happen and prices could spike – although from a lower base,’ the association said.
ALSO READ: Call for relief grant to be extended
HAVE YOUR SAY
Like our Facebook page and follow us on Twitter.
For news straight to your phone invite us:
WhatsApp – 072 069 4169
Instagram – zululand_observer
