Expected fuel price drop this week a boost for consumers

 ·5 Sep 2022

The reported fuel price decreases, set for Wednesday (7 September) are a welcome breath of good news, says the Road Freight Association.

Data indicates estimated decreases in the fuel price in the coming week as follows: R2.35 per litre for ULP95, R2.18 per litre of ULP93, 77 cents for 50ppm and 87 cents for 500ppm. Illuminating paraffin is set to drop by an estimated 87 cents per litre, noted Gavin Kelly, chief executive officer of the Road Freight Association.

He said that any decrease in the cost of fuel – in particular larger decreases – will have a positive effect on transport costs and supply chains.

“Whilst the price of fuel has dropped, the effects into the logistics chain should be felt in the coming quarter and will certainly make life slightly easier for consumers towards the end of the year.

“With fuel prices dropping, there should also be a boost for the local tourism industry to boot.”

Paying less for fuel will go a long way to placing downward pressure on inflation as well as the cost of logistics within South Africa, which is one of the key drivers of the items measured in the inflation basket, the chief executive said.

Fuel price fluctuations are driven by the cost of oil (fuel) on the international market and the rand/dollar exchange rate. “Concerns remain around the effect global instability has on these two factors and the long-term effect high fuel prices will have on the South African economy,” said Kelly.

There would, obviously, be a greater positive/downward effect on freight logistics if the price of diesel was to drop as dramatically as petrol has, as the majority of road freight logistics is done with diesel vehicles, he added.

The association called on the government to speed up programmes to make South Africa less reliant on fuel imports, by improving or expanding Sasol and similar manufacturing processes, as well as ramping up the introduction of suitable and sustainable electric vehicle programmes.

Read: New driver’s licence card for South Africa

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