Cape Town – Although fuel prices are set to drop in April, most of the benefit of the decreases will be wiped out by the increases in the general fuel and Road Accident Fund (RAF) levies.
This is according to the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
Based on the current data, the AA is predicting that petrol will decrease by 51c per litre, diesel by about 27c/litre, and illuminating paraffin by 32c/litre. But most of this will be wiped out when the combined 39c hike in the RAF (9c) and the general fuel levy (30c) kick in on April 1.
“This means that while motorists may have expected the current price per litre of petrol to drop substantially, they will now only see it going down by around 12 cents a litre. Diesel users, on the other hand, will see an increase of 12 cents a litre, with the levies eating up any gains,” the AA said.
The expected fuel price drop is mostly owing to a decline in international oil prices.
The rand/US dollar exchange rate has remained nearly flat since the end of the month, meaning South Africans are likely to see the most of the benefit of the oil price drops, said the AA.
According to the AA, Opec’s reduction in its crude oil output targets has been countered by increasing global oil stocks held by non-Opec nations.
“This has gradually pushed the oil price down to near the levels it was maintaining before Opec’s output targets were adjusted, which is good news for South Africans.
“The rand has shed around four cents against the dollar since the start of March. If this period of relative stability in the exchange rate continues, the currency will only have a small influence on the fuel price at month-end,” said the AA.
By 12:10 the rand was trading at R13.10/$, while Brent crude was selling for $51.66 a barrel.