Fu­el p­ri­ce to drop, but le­vy im­pacts unkno­wn

George Herald - Auto Dealer - - News -

Mas­si­ve fu­el p­ri­ce re­ducti­ons are ex­pected for De­cem­ber, but the­se could be tem­pe­red by ad­jus­t­ments in the re­tail and w­ho­le­s­a­le mar­gin, as well as the pos­si­ble con­ti­nu­ed use of the Sla­te Le­vy. This is ac­cor­ding to the Au­to­mo­bi­le As­so­ci­a­ti­on (AA) com­menting on u­nau­di­ted month-end fu­el p­ri­ce da­ta re­le­a­sed by the Cen­tral E­ner­gy Fund (CEF).

"The good news is a li­ke­ly R1,85 re­ducti­on per lit­re in the p­ri­ce of pe­trol, with die­sel co­ming do­wn by an es­ti­ma­ted R1,40, and il­lu­mi­na­ting pa­raf­fin drop­ping by R1,28. With the­se ex­pected drops, the fu­el pri­ces will re­turn to le­vels last seen a­round the midd­le of 2018," com­ments the AA.

"The­se mas­si­ve de­cre­a­ses stem from a com­bi­na­ti­on of sub­stan­ti­al retre­ats in in­ter­na­ti­o­nal pe­tro­le­um pri­ces and a s­lig­ht­ly fir­mer rand, which has tren­ded stron­ger a­gainst the US dol­lar sin­ce its most re­cent peak in e­ar­ly Sep­tem­ber."

Ho­we­ver, the as­so­ci­a­ti­on says it is pos­si­ble that not all of the­se de­cre­a­ses will ma­ke it through to the mo­to­rist.

"A­pril, Sep­tem­ber and No­vem­ber saw ad­jus­t­ments to va­ri­ous le­vies which are in­clu­ded in the fu­el p­ri­ce struc­tu­re. The De­cem­ber ad­jus­t­ment re­la­tes to w­ho­le­s­a­le and re­tail mar­gins, which could lop off so­me of the de­cre­a­se. Last y­e­ar's ad­jus­t­ment to the­se fi­gu­res was un­der fi­ve cents a lit­re," says the AA.

"The­re is al­so the is­sue of the Sla­te Le­vy which may or may not be re­tai­ned." The Sla­te Le­vy is u­sed to claw back los­ses from fu­el p­ri­ce un­der-re­co­ve­ries w­hen the cu­mu­la­ti­ve pe­trol and die­sel sla­te ba­lan­ces ex­ceed R250-mil­li­on. At the end of Sep­tem­ber the ne­ga­ti­ve ba­lan­ce was R2,2-bil­li­on. This was ap­pa­rent­ly coun­te­rac­ted by the im­po­si­ti­on of a Sla­te Le­vy of 21,92 cents du­ring No­vem­ber.

"If the Sla­te Le­vy has broug­ht the sla­te ba­lan­ce be­low the thres­hold by the end of No­vem­ber, it's li­ke­ly it will be ze­roed. If not, a furt­her Sla­te Le­vy will be ap­pli­ca­ble for De­cem­ber, which will off­set so­me of the fu­el p­ri­ce de­cre­a­se," says the AA.

Ho­we­ver, mo­to­ris­ts could still ex­pect a sub­stan­ti­al drop.

"The see-saw ri­de in fu­el pri­ces o­ver the past y­e­ar has sho­wn how g­re­at the im­pact of in­ter­na­ti­o­nal pe­tro­le­um pricing and the rand to US dol­lar ex­chan­ge ra­te is on the li­ves of or­di­na­ry ci­ti­zens," says the AA. "The out­look for fu­el pricing in­to 2019 re­mains clou­dy. We are ho­pe­ful that so­me sta­bi­li­ty will re­turn."

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