Cape Town - Motorists could soon experience some much-needed relief at fuel pumps, as they are almost paying as much as R30 for a litre of petrol or diesel.
According to mid-month data from the Automobile Association (AA) the current numbers from the Central Energy Fund indicate that the price of 95-octane petrol will drop by 90 cents a litre (c/l), 93-octane petrol is likely to cost R1.07 per litre cheaper.
The wholesale price of diesel is set to decrease by 91c/l and 94c/l for illuminating paraffin.
“We must, however, be cognisant of the fact that this is mid-month data, and that price outlook may change over the next two weeks before the August adjustment is made,” says the AA’s spokesperson Layton Beard.
The slight, but perceptible price drop, said Beard, was attributed to a steady decline in international oil prices which have got the upper hand over a weakening rand.
“According to the data, the drop in international petroleum prices is driving the decreases but they are being offset by a weaker Rand/US dollar exchange rate, which is eroding otherwise sharply declining fuel prices.”
The Western Cape government welcome the news.
Premier Alan Winde said: “Given the relentless rise in fuel costs over the past several months, which have had a considerable knock-on effect on embattled consumers, any reprieve for hard-pressed Western Cape residents is desperately needed."
Western Cape MEC for finance and economic development, Mireille Wenger, said she is also appreciative of the fact that fuel prices are likely to drop.
"We welcome any reprieve in the fuel price following several severe increases. It's good for the economy and the consumer."
The DA has also submitted a proposed bill for the regulation of the price of fuel. This bill seeks to deprive the government of the power to unilaterally set the price of petroleum products.
In the DA’s push for the deregulation for the fuel price, researched showed that in 2016, for example, as a percentage of annual income, South Africans paid the most for fuel in the world. Nearly 4% of South African consumers' income was spent on fuel. The price of petrol compared to the average income is just too expensive.
Doing so will also increase the competitive power of bulk retailers. The idea here is then to bring about lower petrol prices for consumers as retailers will be able to compete on it.
Union Solidarity is on the same page as the DA when it comes to deregulation.
Solidarity said it would also seek to reform the entire fuel industry through steps to deregulation in order to achieve better prices and services for consumers.
At this stage, bulk and retail consumers pay exactly the same for fuel because price negotiation is impossible.
In this way, large transport companies and single consumers pay the same per litre of petrol.