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All fuel prices expected to drop next month

Fuel prices expected to drop.Image:file

Fuel prices expected to drop.Image:file

Published May 19, 2023


Motorists can breathe a sigh of relief at the pumps next month, with news of a possible drop in all fuel prices.

This as the country braces for some good news amid many struggling to make ends meet, while businesses and restaurants remain on the verge of closure.

Among the bad news was when this week Statistics South Africa revealed that unemployment rose to 32.9% in the first three months of 2023, from 32.7% in the final quarter of last year.

And, while the country has seen the worst load shedding implemented, power utility Eskom confirmed that the stages are likely to be ramped up to Stage 8 - and 16 in the worst case scenario.

The blackouts have been reportedly hurting the country’s economy, which is on its knees.

According to the AA, despite the rand taking a dive last week, the fuel outlook for June remained positive, with significant reduction in fuel.

Commenting on unaudited mid-month data from the Central Energy Fund, the association said lower international product prices are the reason behind the predicted decreases.

“The weaker rand/US dollar exchange rate, though, is taking away from the forecast decreases, which would have been more significant had the rand been stronger. As it stands, both grades of petrol are heading for decreases of around R1/litre, while the decreases to diesel are currently standing at around R1.30/litre.

“Importantly, the data are showing that illuminating paraffin, which is such an important fuel at this time of the year, is headed for a decrease of around 80c,” said the AA in a statement.

They said any decrease to fuel prices was welcome and would certainly bring relief to cash-strapped consumers.

“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 AA noted that the outlook for June was made mid-month, and would change before the official adjustment for June was made.

“Nonetheless, we remain confident that significant decreases will be seen to fuel prices for June.”

Economist Bonke Dumisa, in an interview with a broadcaster, said this development was welcome.

“But what we must really rejoice about June is that as I’m looking at my figures for the international Brent crude oil prices this month in May, starting from the very beginning of the month, they’ve been significantly lower than US$80. Which means we will be saving a lot when buying our crude oil. Despite the slight weakness of the rand recently, because when you look at the value of the rand from the beginning of the month till about last Tuesday, it was really at the same level as what we experienced. in April,” said Dumisa.

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