Drop in petrol price expected
The Automobile Association (AA) says the strengthening of the rand and a retreat of international petroleum prices have combined to produce an expected surprise drop in fuel prices at the end of February.
The fuel prices for March is expected to be announced today,
The AA is commenting on unaudited month-end fuel price data released by the Central Energy Fund (CEF).
"After a bit of a stutter at the beginning of February, the Rand has continued to firm against the US dollar throughout the month. At the same time, international oil prices have come off their mid-month highs and are now testing their lowest levels yet for 2017," says the AA.
The AA says it hopes the oil price trend is a sign that the OPEC production cuts announced in 2016 are beginning to be more comprehensively priced into the market, bringing more stability to the fuel price picture.
"Petrol is expected to drop by around seven cents a litre, diesel by about two cents and illuminating paraffin by eight cents," says the AA.
The AA, however, warns that the rise in fuel taxes would see the fuel price picture at the end of March begin with a deficit of 39 cents.
This is a combination of an increase of 30 cents to the general fuel levy, and an increase of nine cents to the Road Accident Fund (RAF) levy. The increases come into effect on 1 April.
"It would take quite a substantial effort from both the Rand and oil prices to offset the tax hikes and prevent higher fuel prices in April," says the AA.