Johannesburg – South African motorists are set to enjoy some fuel price relief in March, but unless oil prices continue to fall that relief will be short-lived.
As Finance Minister Malusi Gigaba announced during his budget speech last week, the fuel levy will increase by 52 cents a liter, but this will only take effect on April 1, meaning that motorists will still enjoy lower prices for the month of March.
So how much cheaper will fuel be?
Based on month-end fuel price data, the Automobile Association is predicting a petrol price decrease of up to 38 cents a liter, while diesel is likely to fall by around 47 cents and illuminating paraffin by 26c.
This would bring the cost of a liter of 95 Unleaded down to R13.25 at the coast and R13.74 in Gauteng.
The AA attributes the price decreases to a favorable exchange rate and lower international oil prices:
“The rand was trading at around R12.00 to the US dollar at the start of February, and has gradually strengthened to an average level approaching R11.80 for the month,” the AA says.
“Over the same period, international fuel prices dropped sharply. Although they have subsequently climbed, the increase has been moderate enough for South African fuel users to see some benefit.”
However, we would either need to see a sharp strengthening of the rand or a further fall in oil prices to absorb the 52 cent hike in fuel levies that come into effect in April.