Johannesburg - There was more bad news for motorists in the Budget Speech earlier this week when Finance Minister Tito Mboweni announced a 25 cent hike in fuel taxes that will come into effect at the beginning of April, but the good news is that there is a temporary reprieve for March.
According to the Automobile Association, unaudited month-end data shows that fuel price cuts across the board are in store for next Wednesday, with petrol set to drop by between nine and 19 cents a litre and diesel falling by around 55 cents.
A litre of 95 Octane petrol currently retails for R15.39 at the coast and R16.03 in Gauteng.
The current savings come as a result of falling global oil prices, which have outweighed the local currency's recent slump. It is anyone’s guess how these factors will see-saw in March, but if current trends persist then April’s fuel price decrease could easily outweigh the looming tax increase of 25 cents, of which 16 cents goes to the general fuel levy and 9 cents to the Road Accident Fund.
Oil prices plummet, but watch out for the rand
This week saw international oil prices suffer one of their steepest plunges in recent history due to fears surrounding the coronavirus and its implications for the global economy.
While this is certainly good news for fuel prices, the rand remains in risky territory with Moody’s set to decide South Africa’s investment rating fate on Friday night.
"It is difficult to predict where current events might lead us,” the AA said. “The rand has not found strength against the US dollar since Finance Minister Tito Mboweni's budget speech, and the consensus of economists is increasingly that South Africa is set to lose its last remaining investment grading before long".
"This will inevitably affect the Rand/US dollar exchange rate, but the precipitous global decline in confidence and economic output as the coronavirus outbreak spreads could provide a balancing factor in the form of lower international petroleum prices," the association added.
It warned that South African motorists should not take any outcome for granted given that South Africa’s economic future is far from clear, as are the long-term implications of the coronavirus.