Read the reality of the coming miserable fuel-price decrease

GOOD news for you and other road-users in South Africa: you can look forward to less-expensive vehicle fuel come February (2018) thanks to falling international prices.

So says the Automobile Association after analysing unaudited month-end fuel-price data released by South Africa’s Central Energy Fund – but what is the reality?

“International (dollar) prices have risen by around 11% in a streak starting on December 14 2017,” the AA reported. “Fortunately for South Africans, the SA rand has been gaining value against the US dollar since the middle of January.”


The stronger rand means the fuel price will drop by R0.32/litre, diesel by R0.17 and illuminating paraffin by R0.20. However in real life, Carman’s Corner says, that’s really just a drop in the automotive propulsion world ocean – R16.00 to fill a 50-litre fuel tank from empty.

That will buy you half a takeaway burger… big deal, though the finance reports will go nuts about it.

The AA added: “Its important for political leaders to note the strengthening effect the recent more hands-on governance (read: Cyril arrived!) approach has had on our exchange rate, reducing costs for businesses and citizens.

“However, we reiterate our concern that the government should avoid using the fuel levy to fund fiscal shortfalls, a concentrated tax with rapid effects on inflation and disposable incomes.”


Reviewing the fuel price history during 2017, the AA says the year saw some of the highest fuel prices in South Africa’s history. And if you think the R16-a-tankful saving is awesome news, bear in mind that, according to the AA, 2017 started with petrol at R12.85/litre, diesel at R11.02.

Then our revered leaders fired Pravin Gordon.

The reversal came in May 2017 as the effect of the sacking of that honourable finance minister filtered into the economy. Fuel prices eventually recovered but, after South Africa’s mid-year credit downturn, it was one-way traffic for fuel prices – six straight months of increases.

December 2017 was notable for petrol reaching R14.76 a litre.


The AA explained: “The downgrade and subsequent fuel-price peaks reversed a declining fuel price trend and caused sustained high fuel prices in a low-growth environment. Businesses, already under margin pressures had little option but to pass on their increased fuel costs to customers.”

The AA is demanding that the ANC commit to promoting policy and governance stability to bolster private-sector confidence and foreign direct investment.

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