While the cost of living continues to remain high in South Africa, motorists might have something to smile about next week.
This comes after the Department of Mineral Resources and Energy (DMRE) welcomed the reduction of international petroleum product prices, including crude oil prices.
In turn, this means that motorists will be paying less at the fuel pumps from next week.
At the close of business on Monday, the price of Brent Crude oil was hovering around $105 per barrel, a reduction, on average, of about 10% compared to the average price for June 2022.
Government has, for the past four months, cushioned South Africans from the vagaries of the oil market and the full impact of the high international oil prices.
A temporary reduction in the general fuel levy of R1.50 per litre was introduced from 6 April 2022 to 5 July 2022. This was reduced to 75c per litre from 6 July 2022 to 2 August 2022.
In a statement, the department said: “Despite this reprieve coming to an end on 2 August 2022, the department can confirm that there will still be a sizeable reduction in fuel prices, including paraffin for South Africans”.
A formal announcement in this regard will be made by the end of the week.
According to unaudited data released by the Central Energy Fund on July 26, the over-recovery for the month so far, points to a decrease of around R1.89 for 95 Unleaded. Unfortunately, what’s left of the “fuel tax holiday” is set to fall away next month, theoretically reducing the decrease to R1.14.
Energy Minister Gwede Mantashe last Friday gazetted a notice calling for public comment within 30 days on the government’s intention to introduce a price cap on 93 octane petrol.
The price of 93 octane increased by R2.37 per litre to R26.31 per litre this month, reaching an all-new record high due to the escalation of global oil prices.
The introduction of a price cap on 93 octane petrol will allow retailers to sell at a price below the regulated price, including discounts on petrol.
This is the next step in the government’s “two-phase approach”, introduced to reduce fuel prices in addition to the temporary reduction in the general fuel levy implemented from April.
BUSINESS REPORT