Fuel price relief on the cards as economists predict sharp petrol and diesel cuts

SOUTH African motorists are set for welcome relief at the pumps on Wednesday, with economists forecasting sizeable cuts to both petrol and diesel prices as global oil prices retreat from recent highs despite the return of the full fuel levy this month.

- YOGASHEN PILLAY

SOUTH African motorists are set for welcome relief at the pumps on Wednesday, with economists forecasting sizeable cuts to both petrol and diesel prices as global oil prices retreat from recent highs despite the return of the full fuel levy this month.

The expected reductions follow a sharp decline in Brent crude oil prices after a ceasefire agreement eased tensions in the Middle East, reversing the spike in oil markets that drove steep fuel price increases in April and May.

Economists say the combined effect of lower international oil prices and a stronger rand has more than offset the impact of government's decision to end temporary fuel levy relief introduced during the recent oil price shock.

Professor Simphiwe Madikizela, an economist at the University of South Africa (Unisa), said a fuel price decrease this week was virtually certain.

“It’s a given because the price of the crude oil price has come down significantly to the level before the middle east war and the peace deal has been signed although it’s volatile”

He noted that Brent crude was currently trading at around $75 (about R1 274) a barrel after briefly falling to around $72, compared with levels approaching $100 a barrel during the height of the conflict.