By Lee-Yandra Paulsen

In a positive turn for consumers, the mineral resources and energy department in South Africa has confirmed significant price cuts for petrol and diesel, providing some respite amid economic challenges. Effective from midnight, the price of petrol (93 ULP and LRP) has decreased by 62 cents per litre, while the price of petrol (95 ULP and LRP) saw a more substantial drop of 76 cents per litre. Additionally, the price of diesel has decreased by a range of R1.18 to R1.26 per litre, and the wholesale price of illuminating paraffin has seen a reduction of 93 cents per litre.

The spokesperson for the Automobile Association, Eleanor Mavimbela, discussed the fuel price decrease in an interview with VOC Breakfast on Wednesday, highlighting the factors influencing this positive change. Mavimbela highlighted the crucial role played by international product prices and the rand-dollar exchange rate in determining fuel prices in South Africa. For the current decrease, she noted that it was primarily driven by the decline in international product prices.

Mavimbela pointed out an interesting trend, stating, “It is a trend for fuel prices to decrease during the months of November to February.” She attributed this pattern to the timing of significant national events such as the State of the Nation (SONA) and the Budget Speech in February. During this period, the Finance Minister, Enoch Godongwana decides on adjustments to the general fuel price levy. Mavimbela noted that the minister has refrained from increasing the levy for the past two years, contributing positively to the overall fuel pricing landscape.

Expressing some caution, Mavimbela remarked, “Although the fuel prices have decreased, consumers are still feeling the effects from the largest increases in fuel prices we had between September and October.” She explained that consumers often absorb fuel price increases more quickly than decreases, affecting their pockets and, consequently, the broader economy. Despite the positive news of price cuts, the economic effects of these decreases may take time to manifest in consumers’ day-to-day expenses, particularly concerning essential items like staple foods.

The spokesperson highlighted the ongoing uncertainty regarding the general fuel levy and expressed scepticism about the minister maintaining the current level for a third consecutive year. Any increase in the fuel levy, she cautioned, could lead to a significant and rapid impact on fuel prices, affecting consumers across the board.

VOC News