Can motorists expect a certain amount of relief within the next few weeks?
Mid-month data from the Central Energy Fund shows South African motorists might be in store for a significant petrol price cut in July.
This follows the group’s latest data showing a large over-recovery for both grades of petrol, diesel and illuminating paraffin.
Just how much of a price drop can road users expect?
According to the Central Energy Fund, if the current conditions continue for the next few weeks, the petrol price might be cut by around 90 cents per litre. Diesel could see a 70 cents per litre drop.
The drop in the price of international petroleum products, which are down by 14% over the past month, driven by the falling oil prices, is the biggest contributing factor to the price forecast.
However, while motorists are anxiously waiting for a decrease in fuel prices, there is a possibility in a reversal of the recent trends. This follows apparent attacks on oil tankers in the Gulf of Oman on June 14.
Furthermore, the spot price of oil on June 14 saw Brent crude at $62 a barrel. This is up more than 3% on news of the tanker attacks.
Then there is the weakening Rand which is not helping South African petrol prices. South Africa’s weaker exchange rate is currently contributing a 17 cents per litre hike in prices.
Despite the weakening rand, there is still a substantial amount of hope.
Automobile Association spokesperson Layton Beard says if the Rand holds where it is currently standing or improves, or if the international oil prices remain or improve, the outlook will be better as we go into July. However, he is confident there will be a decrease in fuel prices.
With the price hikes over recent months, the decrease will be a welcome sense of relief.