Motorists will find some joy in the second month of the year as early data from the Central Energy Fund (CEF) points to a slight decrease in fuel prices.
According to mid-month data from the CEF, prices for petrol and diesel in February 2023 are set to drop due to rising international petroleum costs.
Petrol prices are expected to come down by as much as 25 cents a litre, while diesel is on track for a 50 to 60 cents per litre drop.
According to Abigail Moyo, the spokesperson of the trade union UASA, the recent fuel price cut will have consumers in high spirits as it will increase their spending power.
Moyo said: “Particularly parents of school-going children will be in good spirits as it will put more disposable income in their pockets, heightening their spending power.”
“As most workers end their festive season and learners prepare to return to school, UASA is pleased about the effect of the lower prices on South African pockets,” Moyo said.
The Department of Energy has stressed that the daily snapshots were not predictive and did not cover other potential changes, like slate levy adjustments or retail margin changes, which were determined by the department at the end of the month, taking all variables into account.
These are the expected changes:
- Petrol 93: decrease of 18 cents a litre;
- Petrol 95: decrease of 25 cents a litre;
- Diesel 0.05%: decrease 50 cents a litre;
- Diesel 0.005%: decrease of 63 cents a litre;
- Illuminating paraffin: decrease of 46 cents a litre.
Interest rate increase may put further pressure on consumers. In December 2022, Momentum Investment’s Consumer pulse told Business Report that consumers’ pockets would remain constrained in the coming quarters given persistent core inflation pressures and the anticipated further interest rate hike by the SA Reserve Bank (SARB) in January.
The SARB was expected to hike the repo rate in an attempt to anchor inflation, with expectations at the mid-point of the target range.
Meanwhile, talking about the fuel price decrease, Debt Rescue CEO Neil Roets said that although any financial relief was good news for South African consumers, it is small comfort to the millions of families who were heading into 2023 in a far worse position financially than in 2022.
He noted that with each petrol price increase in 2022, South Africans seen the second round inflationary pressures add up and hit consumers with a cost of transport increase, in addition to the increase that is passed on from retailers who need to transport food to their stores – yet, previous drops in fuel prices during 2022 did not see a subsequent drop in food prices.
Food price inflation went in the opposite direction.
“With 81% of South African households now fighting a daily battle to put enough food on the table, what respite can authorities offer to give people some hope for the future,” Roets said.
BUSINESS REPORT