Despite recent rand weakness against the US dollar, the average exchange rate against the US currency is favourable and fuel prices in the country are expected to decrease significantly when adjusted next week.

The Automobile Association (AA) said unaudited data from the Central Energy Fund (CEF) is indicating significant reductions in fuel prices across the board, but specifically the prices of petrol.

“These decreases are certainly welcome and will provide some relief to motorists,” said the AA.

The downward movement in international product prices – oil prices – are the main driver behind the expected decreases contributing 94% to the projected reductions. The average rand/US dollar exchange rate is playing a smaller role but is contributing the expected decreases.

“Although we expect fuel to be cheaper in September, we remain concerned about the overall high prices which impact on all consumers. The price hikes in June and July will continue to impact the economy, and on the financial situation of all South Africans. A sustainable solution to mitigating rising fuel costs is necessary and until that solution is found, citizens will be at the mercy of fuel price hikes,” said the Association.

The AA again called on government to urgently initiate a transparent review of the fuel price to seek answers. It stands by its earlier position that scrapping the general fuel levy is not the solution.

“We note the calls by those who say this is a way of reducing the fuel price, but in our view this will not solve the problem. It will simply force government to find alternative ways to collect the revenue generated by this tax. Instead, the structure and composition of the fuel price must be considered, along with a deeper interrogation of how government allocates its funds.”

Source: TimesLIVE