Good news for vehicle owners! Petrol price is set to decrease by 9 cents next week Wednesday, 5 May 2021. So far in the year, fuel costs have been hit by an increase four times at the start of each new month.

On Friday, the Automobile Association had estimated a drop in fuel prices across the board, after a record hike of 100 cents per litre of fuel in April.

PETROL PRICE SET TO DECREASE

In a statement, the Department of Mineral Resources said that petrol price will decrease by nine cents a litre from Wednesday while that for diesel will decrease by up to 31 cents/l. The retail price of illuminating paraffin, on which many South Africans still rely for cooking and lighting especially in the rural areas, would be 30 cents lower as well. Liquefied petroleum gas will decrease by a  R1.72 a litre.

South Africa retrospectively adjusts fuel prices each month based on global oil prices and the rand exchange rate. Price changes are adjusted in such a manner that the over- or under-recovery of procurement costs during the prior month is accounted for in the following month.

The rand appreciated against the United States dollar, averaging 14.4480 per greenback between March 31 and April 29 compared with 14.9829 during the previous period.

“This led to a lower contribution to the basic fuel prices on petrol, diesel and illuminating paraffin by 26.31 c/l (cents per litre), 24.10 c/l and 23.58 c/l respectively,” the department said.

Investec Chief Economist, Annabel Bishop told News24 that a small decrease in the price of fuel was to be expected.

“Following hefty price hikes of R2.96/l over the first four months of the year. This will help keep inflation around 3% year-on-year for the first quarter,” Bishop said.

READ: May petrol price: MORE increases coming – as another grim record looms

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Presh JM Reporter

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