Petrol Price: Expect a drop in February

According to the Automobile Association (AA), the South African petrol price is set to drop in February, Fin24 reported.

How much will the petrol price drop by?

Petrol could drop by as much as 32 cents a litre, while diesel could decrease by 17 cents and paraffin by 20 cents.

With the rand trading at its lowest level since 2015 and the AA says that this is likely to have an impact on fuel prices.

“International (fuel) prices have risen by around 11%  in a streak starting on 14 December 2017,” the AA said, commenting on unaudited month-end fuel price data released by the Central Energy Fund.

“Fortunately for South Africans, the rand/US dollar exchange rate has enjoyed a strengthening trend for almost as long, with the local currency accelerating its gains since the middle of January,” it said.

In 2017, consumers were hit with some of the highest fuel prices in the country’s history. The year began with moderate prices with petrol at R12.85 a litre and diesel at R11.02. By the end of the year, petrol was at an all-time high of R14.76 a litre.

“It is important for political leaders to note the strengthening effect the recent more hands-on governance approach has had on our exchange rate, reducing many input costs for both businesses and private citizens,” the AA said.

“However, we reiterate our concern that the government should avoid using the fuel levy to fund fiscal shortfalls, as it is a concentrated tax with rapid effects on inflation and disposable incomes.”

All eyes will be on Malusi Gigaba later this year when he is due to give his first full speech as South Africa’s Finance Minister. This is likely where an announcement on the fuel levy will be made.

The General Fuel Levy is a tax charged for every litre of petrol. The money is administered by the National Treasury, and is treated as a general tax and not, as many people assume, for road-related expenses