The petrol price, at a three-year low, is likely to go even lower with an estimated drop of 69c a litre in September.
This means 93 unleaded, which costs R12.08 a litre, will cost R11.39 a litre, which is less than South Africans paid for it in September four years ago.
The petrol price went down by 99c from July to August, and the Automobile Association (AA) said a 69c a litre decrease is on the cards for September, based on information from the Central Energy Fund.
In spite of an increase in the oil price, the lower price of petrol is largely a result of the ongoing strength of the rand, which is R13.20 to the dollar this week.
“The rand firmed substantially against the United States dollar in the first fortnight of August,” the AA said, noting that, although oil prices are on the rise, “fortunately for South Africans, the rand is ahead in the contest and the current data indicates considerable price reductions at month end. ”
Diesel is also slated for a drop (94c), as is illuminating paraffin (92c), despite average inflation breaching 5% in each year since 2012 and annual increases in the fuel and Road Accident Fund levies.
If taxes and other costs are stripped out, the basic fuel cost is lower than what it was in 2012.
According to the department of energy, the basic fuel price for 93 unleaded in August this year is R4.96 a litre. In August 2012, it was R5.98 a litre.
In 2012, the rand was R8.4 to the dollar and the price per barrel of Brent crude oil was more than $110.
“If you consider inflation and all the fuel levies added to it, the current fuel price is really good,” said Layton Beard, the association’s spokesperson.
Based on the AA’s breakdown of the fuel price in April, the cost of a litre of petrol bought inland could be accounted for as follows: 42.7% for the basic fuel price, freight, insurance, cargo dues, storage and financing; 21.67% for further storage, wholesale and retail margins, transport and distribution, and other related costs; 12.5% for the Road Accident Fund; and 23.13% for the fuel levy.
The AA warned that the expected decrease for September will depend on whether the rand’s strength continues to beat global oil prices. “Any flattening out of the rand’s gains would be negative for the fuel price, but there would have to be a substantial reversal for the current picture to be spoiled before the end of August.”
Meanwhile, some filling stations are still suffering from fuel shortages as a result of the chemical workers’ strike, which entered its third week on Monday.
According to the energy department, petrol attendant wage agreements are typically renegotiated in September. The National Union of Metalworkers of South Africa signed a three-year wage agreement on behalf of its members in the automotive and fuel pump industries in September 2013.