Fuel prices likely to drop in April

According to the Automobile Association of South Africa (AA), fuel prices look set to decrease in April, and even with the fuel levy and RAF levy increase taking effect in April the fuel price should be cheaper than March.

The official fuel price announcement will be made by the Department of Energy at the end of the week, with the new prices taking effect on 5 April.

In explaining the reason for the possible decrease, the AA said: “International petroleum prices continued to ease during March on the back of increased global oil stocks which have mostly blunted OPEC's recent production restrictions. Over the same period, the Rand performed strongly against the US dollar, notwithstanding recent events.”

The expected increases

The expected fuel price adjustments are that petrol will drop by about 24 cents per litre, while diesel may see a nine cents per litre drop.

However, with the current political uncertainty in the country, the AA cautioned that developments in government may have an impact on factors relating to the fuel price prior to the announcement later this week.

“In our view, the Presidency was ill-advised to call off the Treasury's international roadshow at such short notice with so little detail given. The resultant sharp weakening of the Rand again demonstrates the importance of political and fiscal stability to investors,” noted the AA.

The AA added that any further political shocks which may weaken the Rand will directly result in increased transport costs, as well as higher domestic costs for those who use paraffin for heating, cooking and lighting.

The RAF and fuel levies

In April the fuel levy will increase by 30 cents bringing it to R3.15 per litre, while the road accident fund (RAF) levy will see an increase of nine cents with a new fee of R1.63 per litre.

Regardless of whether the fuel price is increased or decreased in April, there will be an increase of 39 cents per litre for levies.

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