The petrol price is set to drop by close to R2 in April
- The petrol price will decline by a large margin in April - just as South Africans, who are stuck at home during lockdown, need it least.
- If Brent crude oil and the rand remain at current levels, the price of 95 unleaded petrol could decline by R1.93.
- Diesel could fall by R1.64.
- For more stories go to the Business Insider South Africa homepage.
The petrol price is set to decline by close to R2 in April when most South Africans will be forced to stay at home during the national lockdown to slow down the spread of Covid-19.
This depends, however, if current Brent crude oil prices and the rand remain at current levels.
The latest data from the central energy fund (CEF) showed that the price for 95 unleaded petrol will decrease by R2.18. But in the first week of April, fuel taxes of 25c will be levied, as announced in February's national budget. This will bring the current estimate for 93 to R13.40, and for 95 to R13.91 Diesel prices may decline by 164c.
This will make the fuel price the cheapest it has been the past year.
The fund calculates the daily movement in the Brent crude oil price and strength of the rand to determine whether the price of fuel, set by the department of energy once a month, should increase or decrease.
The potential price decline is predominantly influenced by a drop in the Brent crude oil price, currently trading below $30 per barrel - it’s the lowest price since 2016.
The price of Brent Crude oil fell at the beginning of March after Saudi Arabia decided to unilaterally cut its own oil prices after it was unable to reach an agreement with Russia to cut production.
The potential petrol price decline would’ve, however, been larger if it wasn’t for the poor performance of the South African rand over the past few weeks, which fell to below R17 to the US dollar last week in response to market uncertainty due to the coronavirus.
The 25c hike in fuel levies and the road accident fund contributions in April will also take a bite.
In total, South Africans will, from April, pay R5.88 in tax on each litre of fuel.
Receive a daily update on your cellphone with all our latest news: click here.
Also from Business Insider South Africa:
- Netflorist now delivers fruit and vegetables in a day - with hot meals coming soon
- You are legally required to report a neighbour with the coronavirus in South Africa
- Obituary | Sol Kerzner, a perfectionist with a short fuse
- Does UV light kill germs? Getting an at-home sanitiser may be worth it
- SpaceX VP reportedly cites Elon Musk’s ‘coronavirus panic is dumb’ tweet to concerned employees