- For more financial news, go to the News24 Business front page.
The diesel price may be cut by 78c a litre next week, while the petrol price should remain largely unchanged.
Based on the latest data from the Central Energy Fund, the Automobile Association (AA) estimates that 95 unleaded petrol could fall by 1.5c a litre, while 93 will decrease by 4c. Illuminating paraffin is set to fall by R1.39 a litre.
Fuel prices, which will be adjusted on Wednesday 5 April, are largely determined by the oil price, as well as the rand - as oil is priced in dollar.
"The main driver behind the decreases is lower international product prices, while the higher average rand/US dollar exchange rate is counter-balancing these gains. The weaker rand is eroding around 40c/l of the decreases, meaning the decreases could have been more significant had the rand been stronger throughout March," notes the AA.
The association cautions that the data is only reflecting the basic fuel price, and that other factors such as zone differential costs (the cost of transporting fuel from coastal to inland areas), and adjustments to the Slate Levy (used to claw back losses from fuel price under-recoveries) may still be made by the Department of Mineral Resources and Energy. These adjustments will impact prices, but this will only be announced next week.
"The good news, though, is that if adjustments to zone differential costs and the Slate Levy are made, petrol prices are not likely to increase significantly and diesel and illuminating paraffin prices are still set to come down. The diesel decrease is particularly important because it is a major input cost in the manufacturing, mining, and agricultural sectors, and a decrease to this fuel could prevent immediate rising costs in goods and services," the AA notes.
While the Brent oil price has fallen from above $84 a barrel to around $80, the rand has taken a big knock this month. In recent days it has been steadying, getting a major lift following a bigger-than-expected rate hike on Thursday.
Petrol prices were hiked by R1.27 at the start of March, while diesel increased by between 30c and 32c a litre.
In Gauteng, the price of a litre of 95 unleaded petrol increased to R22.95, while it will increase to R22.30 on the coast. A year ago, 95-octane petrol retailed for R21.60 in Gauteng.
The Gauteng wholesale diesel price reached R21.62, from R18.87 a year ago.