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SA can expect ‘massive’ fuel price cuts in December, but…

SA can expect 'massive' fuel price cuts in December, but…
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The Automobile Association says South Africa motorists can expect “massive” fuel price cuts in December, but adds these “could be tempered by adjustments in the retail and wholesale margin, and the possible continued use of the Slate Levy”.

“The good news is a likely R1,85 reduction per litre in the price of petrol, with diesel coming down by an estimated R1,40, and illuminating paraffin dropping by R1.28. With these expected drops, the fuel prices will return to levels last seen around the middle of 2018,” the AA said, commenting on unaudited month-end fuel price data released by the Central Energy Fund.

“These massive decreases stem from a combination of substantial retreats in international petroleum prices and a slightly firmer rand, which has trended stronger against the US dollar since its most recent peak in early-September at close R15,50 to the greenback,” the Association added.

“However, it is possible that not all of these decreases will make it through to the motorist. April, September and November saw adjustments to various levies which are included in the fuel price structure. The December adjustment relates amongst others to wholesale and retail margins, which could lop off some of the decreases. Last year’s adjustments to these figures were under five cents a litre,” the AA explained.

There is also the issue of the Slate Levy, which may or may not be retained. The Slate Levy, the AA says, is used to “claw back losses from fuel price under-recoveries” when the cumulative petrol and diesel slate balances exceed R250-million. At the end of September, the negative balance was R2,2-billion, and this was apparently counteracted by the imposition of a Slate Levy of 21,92 cents during November.

“If the Slate Levy has brought the slate balance below the threshold by the end of November, it’s likely it will be zeroed. If not, a further Slate Levy will be applicable for December, which will offset some of the fuel price decreases,” the organisation said.

Article written by

Ryan Bubear

Ryan has spent most of his career in online media, writing about everything from sport to politics and other forms of crime. But his true passion – reignited by a 1971 Austin Mini Mk3 still tucked lifeless in a dark corner of his garage – is of the automotive variety.

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