The per litre price of all grades of petrol will be 30c cheaper from this Wednesday, the Department of Energy announced on Monday.
The latest decrease comes on the back of a sterling rand performance against the dollar.
The price of both grades of diesel will decline by 17c a litre, illuminating paraffin (wholesale) and illuminating paraffin (Single Maximum National Retail price) 19c and 26c respectively and the maximum retail price of LPGas will decrease by 23c a kilogram.
The rand was still trading at its lowest levels since mid-2015 on Monday and by 08:57 the local unit was trading at R12.08 to the greenback. The election of Cyril Ramaphosa as leader of the ruling ANC, together with global risk-on sentiment and a weaker dollar fuelled the rand’s rally to under R12/$ for the bigger part of January.
The energy department said in a statement that the rand appreciated more than 100c against the US dollar in the period under review, compared to the previous period, which led to a lower contribution to the basic fuel prices on petrol, diesel and illuminating paraffin by 52.85c, 54.66c and 54.88c a litre respectively.
The average rand/US dollar exchange rate for the period 28 December 2017 to 1 February 2018 was 12.2029 compared to 13.2303 during the previous period, according to the statement.
Reviewing the fuel price history during 2017, the Automobile Association last week said the year saw some of the highest fuel prices in the country’s history.
If one should graph the exchange rate, it is “inescapable that almost all sudden movements are associated with political events”.
The AA therefore urged government to take a “more judicious approach to policy and governance” as rand weakness “affects poorer people disproportionately”.
It highlighted the axing of former finance minister Pravin Gordhan and the sovereign credit rating downgrades as notable events affecting the rand and subsequent fuel prices negatively.
December 2017 saw the petrol price reach an all-time record high of R14.76 a litre.
“The downgrade and subsequent fuel price peaks reversed a declining fuel price trend and caused sustained high fuel prices in a low-growth environment. Businesses, already under margin pressures, had little option but to pass on their increased fuel costs to consumers,” the AA said. — Fin24