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Following two consecutive months of substantial fuel decreases, the tide appears to be turning and South Africans can expect either minor relief at the pumps in petrol prices and slight increases to diesel and paraffin prices in August. According to the Automobile Association (AA), current unaudited data from the Central Energy Fund (CEF) is indicating these trends at mid-month. These trends are likely to change as the month progresses.

The current numbers are showing 95ULP down by around seven cents/litre, 93ULP down by around four cents/litre, and the wholesale price of diesel down by around one cents/litre. Illuminating paraffin is set for an increase of around 6cents/litre.

“It’s important to remember that this is mid-month data and that the price outlook may still change drastically over the next two weeks before the official August adjustment is made, especially since the data is edging so close to revealing a different trajectory,” notes the Association.

The Association says sharp increases in international product prices from the middle of June are pushing towards an under-recovery for all fuel prices. But, notes the AA, the Rand/US dollar exchange rate is assisting to buffer against a bigger increase for diesel and illuminating paraffin, bringing forward a nominal decrease for both 95 and 93ULP.

The Association further notes that despite the forecast decreases in petrol prices, fuel prices in South Africa remain high and that previous significant increases will still impact the economy in the coming months.

“Decreases offer immediate relief at the pumps, but those sectors affected by them don’t immediately adjust their prices downward and instead wait for more consistent fuel cuts that lower their input costs over time. We stand by our call that a review of the fuel price structure, and an audit of the components that comprise the fuel price, is essential and long overdue to offer sustainable solutions that mitigate against rising fuel costs in the country,” concludes the AA.

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