“With these expected drops, the fuel prices will return to levels last seen around the middle of 2018,” the AA said.
“These massive decreases stem from a combination of substantial retreats in international petroleum prices and a slightly firmer rand, which has trended stronger against the US dollar since its most recent peak in early-September at close R15.50 to the greenback.”
However, the association says it is possible that not all of these decreases will make it through to the motorist.
“April, September and November saw adjustments to various levies which are included in the fuel price structure. The December adjustment relates amongst others to wholesale and retail margins, which could lop off some of the decrease. Last year’s adjustments to these figures was under five cents a litre,” says the AA. “There is also the issue of the slate levy which may or may not be retained.”
The slate levy is used to claw back losses from fuel price under-recoveries when the cumulative petrol and diesel slate balances exceed R250m. At the end of September the negative balance was R2.2bn, and this was apparently counteracted by the imposition of a slate levy of 21.92c during November.
“If the slate levy has brought the slate balance below the threshold by the end of November, it’s likely it will be zeroed. If not, a further slate levy will be applicable for December, which will offset some of the fuel price decrease,” the AA said.
Despite this, the association predicted that motorists are still in for a substantial drop.
“The see-saw ride in fuel prices over the past year has shown just how great the impact of international petroleum pricing and the rand/US dollar exchange rate is on the lives of ordinary citizens. The outlook for fuel pricing into 2019 remains cloudy, but we are hopeful that some stability will return.”