Fuel price to drop after record hike in April

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Astron Energy's Cape Town refinery supplies Caltex petrol stations.
Astron Energy's Cape Town refinery supplies Caltex petrol stations.

Motorists will have a small breather as the Department of Mineral Resources announced a price drop in fuel for May.

This follows record hikes of 100 cents per litre of petrol introduced in April.

Petrol (both 93 and 95 ULP and LRP) - will drop by 9 cents per litre, while diesel will drop by 31 cents per litre. Illuminating paraffin will drop by 23 cents per litre. 

The department said slight strengthening of the rand, as well as a drop in the average Brent Crude oil price, were contributing factors to lower prices.

"The vessel [Ever Given] that was stuck in the Suez Canal, causing a delay for all cargo containers including oil tankers, was freed easing fears regarding supply disruptions. The markets anticipate that OPEC and Russia will agree to ease production cuts from May 2021 during their next meeting," the Department said. 

By April, petrol prices had reached the R17.00/l territory. Revised fuel and road accident fund levies had also kicked in.

On Friday, the Automobile Association had estimated fuel price drops across the board.

"As we head into winter, South Africans who use paraffin for lighting, cooking, and heating especially will no doubt be glad at this news. For its part, the AA is hopeful the recent streak of price stability will continue to provide more price relief to fuel users in the short to medium term," it said in a statement.

Investec economist Annabel Bishop similarly noted that a small cut would be on the cards, following hefty price hikes of R2.96/l over the first four months of the year. This will help to keep inflation around 3% year-on-year for the first quarter, Bishop added.

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