South Africans will be delighted at the news of a decrease in the price of fuel next week Wednesday with petrol and diesel prices set to decrease by between 73c and 76c per litre, depending on the grade of fuel.
Due to the fact that South Africa buys fuel in dollars, the Dollar-Rand value, as well as international oil prices, dictates the price of fuel locally.
While the price of Brent crude steadily rose over the past month, there has been a decline in local oil import prices, subsequently counteracting the weakening rand.
Over the past month, the rand has weakened by 35c from R15.39/dollar to R15.74/dollar. Over the course of the last year, a litre of 95 has gone from R14,86/litre in January 2021 to R20,29/litre at the time of writing. This can be attributed mainly to soaring oil prices.
As a result of lockdown restrictions being eased globally and the subsequent increase in economic demand, the price of oil saw its biggest annual gain in over a decade.
In November, a miscalculation in the adjustment of wages for service station workers resulted in an increase of 81c per litre as opposed to the intended 75c per litre. This due to the 6c per litre wage increase being added in September 2021 and then accidentally again in November. While the error was quickly corrected by the department of mineral resources and energy, many motorists ended paying more than they should have when refuelling their vehicles.
In response to the embarrassing error, the Automobile Association commented, “The error by the DMRE validates the AA’s call that a total review of the fuel price, and an audit of all the process and components which comprise the fuel price, is necessary.”
In addition to all this, there has been general unhappiness due to the fact that the CEF has stopped publishing daily forecasts of fuel price movements.
