Cape Town – Motorists in South Africa can expect petrol and diesel price cuts starting from June 7.
This is despite the rand tanking to its weakest point on record against the US dollar.
Unaudited data from the Central Energy Fund indicates that petrol prices may decrease by approximately 70 cents per litre, while diesel could drop by around 80 cents.
The final adjustments will be announced by the Department of Energy, and the Slate Levy, which compensates for fuel price fluctuations, could affect the final figures.
Assuming a 70 cent reduction, the expected prices for 95 Unleaded petrol will be around R21.92 per litre at the coast and R22.64 inland, while 93 ULP will cost R22.31.
Nonetheless, the projected fuel price cuts of 70 to 80 cents are significant and will have a positive effect on inflation, IOL reported.
The projected decreases, although lower than they could have been due to a weak rand, will still positively impact inflation and provide relief for consumers and the economy.
“These decreases are positive and will ease pressure on our economy and on consumers. Of course, this is only one indicator, and we cannot ignore higher interest rates and food prices but a decrease to fuel costs will make a difference to many,” the report quoted the Automobile Association of South Africa (AA) as saying.
According to Business Tech, the biggest contributor to price relief comes from the lower oil price, which is helping to ease international product prices and delivering an over recovery of between R1.27 and R1.37 per litre.
However, the recent rand weakness has eaten away at this pretty significantly, cutting around 43 cents per litre from the benefit, the report said.
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Compiled by Betha Madhomu
