Fuel prices set to drop Wednesday, says AA

Unaudited data from the Central Energy Fund (CEF) points to major fuel price decreases in July, particularly for petrol.

It will mark the first time in 2024 that prices have fallen in two consecutive months and the Automobile Association (AA) says it will bring much-needed relief to embattled consumers when the mineral resources and energy department adjusts prices on July 3.

According to the latest unaudited data from the CEF, ULP93 and ULP95 are expected to drop by about R1/l while diesel and illuminating paraffin prices are likely to drop by about 30c/l and 25c/l, respectively.

“A second consecutive drop in fuel prices is good news for consumers, motorists and the economy. Lower fuel prices will especially benefit South Africans with vehicles who will save a little on their monthly transport budgets. Consumers will also benefit as input costs won’t be negatively affected and prices at the till are unlikely to increase,” the AA said.

While the rand has performed better against the dollar in recent weeks, its affect on the decreases is minimal in the context of the bigger picture, which the CEF data indicates is being driven almost entirely by movements in international product pricing.

The AA said if the expected decreases are realised, fuel pricing would be similar to December 2023, when a litre of ULP95, for example, cost R23.25 inland.

“Though we expect fuel to be cheaper in July, we remain concerned about soaring prices, which affect all consumers. A sustainable solution to mitigating rising fuel costs is still necessary and until that solution is found, citizens will be at the mercy of fuel price hikes.

“As the country awaits finalisation of the new cabinet, we implore the new administration to prioritise finding sustainable solutions to rising fuel costs by conducting a long overdue and transparent review of the fuel pricing structure,” the AA said.

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