While baseline unaudited figures from the Central Energy Fund (CEF) for fuel prices in December are currently indicating a decrease of around seven cents a litre to ULP93, and a slight increase of three cents to ULP95, adjustments to industry margins could see prices to both fuels increase. The Automobile Association (AA) says while motorists’ travel plans will be dampened by increases, they are unlikely to result in large-scale changes to holiday travel plans of those embarking on long year-end journeys.
The Regulatory Accounting System (RAS) – the guidelines for the fuel industry that determines margins for petrol at wholesale, retail, and secondary storage, and distribution levels – could offset any gains and add to under-recoveries for petrol prices. The full impact of the inclusion of the RAS adjustments will only be known when the Department of Mineral Resources and Energy (DMRE) makes the official fuel adjustments next Wednesday.
“It’s probable that the annual margin adjustments could also have a negative impact on the expected increase of around 48c/l to diesel, also pushing this fuel price higher. The expected increase of around 43c/l for illuminating paraffin will also not come as good news for users of this fuel in December,” says the AA.
Apart from the margin adjustments, the mixed outlook for fuel prices can be attributed to fluctuations in the international product prices of unleaded fuel since mid-November. Additionally, the depreciation of the Rand against the US Dollar at the beginning of the month has added to the under-recovery (increase) of fuel prices.
The Association emphasizes that the increases in diesel prices will have negative consequences for all consumers, as higher input costs will likely lead to increased prices at stores.
“We urge consumers to monitor their fuel usage closely and to budget according to the new fuel prices, which will take effect at midnight Tuesday 3 December. Ensuring vehicles are well-maintained, carefully planning routes, and avoiding heavy traffic whenever possible are some strategies that motorists can use to improve fuel consumption,” notes the AA.
Ahead of the expected year-end increase to traffic on major routes across the country, the AA also again urges motorists to ensure they have the right mindset before setting off on their holidays.
“A well-maintained vehicle is critical but so is a good attitude when driving. Understand that you will be sharing the road with many thousands of other travellers, and that your and other road users’ safety is your shared responsibility. Obey the rules of the road, be courteous to other drivers, and rest every 200km or every two hours to ensure you are alert,” the AA concludes.
