Relief for motorists as fuel price set to drop

MOTORISTS will heave a sigh of relief next month after it was forecast that the fuel price would decrease slightly for the first time in three months.

The Automobile Association (AA) attributed the decrease to a tug-of-war between international oil prices and the rand versus the US dollar exchange rate.

AA spokesperson Layton Beard said the association was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.

Beard said petrol was set for a decrease of around 9c a litre, with diesel coming down by about 7c, and illuminating paraffin lower by 12c.

“Oil prices have slipped a little, with the landed price of fuels in South Africa showing a slight reduction in the first half of August.

“Over the past six weeks, oil has traded in a fairly narrow band, indicating that a more reliable plateau has been reached, absent any unexpected shocks,” said Beard.

However, he said the AA had noted that the rand had lost ground against the US dollar since the start of the month. The average rate climbed from just over R16.80 to the dollar to nearer R17.40.

For the past three months, petrol prices have been going up.

This month there was a marginal increase of 5 cents per litre in both grades of petrol, while diesel saw a bigger increase of 45 cents a litre and illuminating paraffin had an increase of 39 cents per litre.

Dawie Roodt, economist at the Efficient Group, said that even though the predicted price drop was low, it would play a role in savings for motorists.

“What we have seen for the past three months is that the oil price was at a record low level and it started going up, and it affected the past three months. It’s a yo-yo kind of thing between the oil price and the rand,” Roodt said.

Roodt predicted that in the months ahead, there would be further reductions in the fuel price.