More fuel price cuts expected in September

Motorists will continue feeling relief at fuel pumps, with mid-month data predicting another fuel price decrease on the cards for September. This will be the fourth consecutive month this year that fuel prices have dropped across the board in South Africa.

According to the Automobile Association (AA), petrol, diesel, and illuminating paraffin will cost less in September than at any other time this year.

Based on unaudited mid-month data from the Central Energy Fund (CEF), ULP95 is set to decrease by around 68 cents/litre and 63c per litre for ULP93. Diesel is also set for a decrease of around 52c per litre. The unaudited data also indicates a reduction in the cost of illuminating paraffin of around 78c/l.

“These decreases, if materialised, will bring the price of fuel to levels seen at the beginning of the year and will come at a very critical time for South Africans who have had to dig deeper into their pockets to fill up their vehicles and food trolleys” says the AA.

According to the Central Energy Fund’s data, lower on average international product prices are the main driver behind the potential decreases for September. The strengthening Rand against the US Dollar also assisted slightly.

Lower stable fuel prices play a crucial role in the decrease of inflation, and the price of goods and services. It would benefit the economy if the fuel price decrease trajectory continued for longer.

“Naturally, this is welcomed news for all South Africans and will certainly alleviate pressure on many households.”

The AA however reiterated that the drop in fuel prices must not negate the need for a review of administered prices, including of the fuel price formula, which was announced in July by President Cyril Ramaphosa.

“We again call for this review to happen with urgency in the interests of finding long-term ways of mitigating fuel price hikes in the future”

The official fuel price adjustments will come into effect on Wednesday, 4 September. An announcement on the final prices will be made by the Department of Mineral Resources and Energy.