South African motorists can likely expect good news next month as the price of international oil drops.
Mid-month data from the Central Energy Fund shows there is currently an over-recovery in petrol prices, leading to a decrease next month of between R1,11 and R1,13 per litre.
Diesel drivers may also see another cut in fuel prices, with recent data pointing to an over-recovery between R1,27 and R1,36 per litre.
These are the expected changes:
Petrol 93: decrease 113 cents a litre;
Petrol 95: decrease 111 cents a litre;
Diesel 0,05%: decrease 136 cents a litre;
Diesel 0,005%: decrease of 127 cents a litre;
Illuminating paraffin: decrease of 79 cents a litre.
The Department of Energy (DOE) said its daily snapshots are not predictive and do not encompass other possible modifications, such as slate levy adjustments or retail margin changes. The department determines these adjustments, which consider various factors, at the end of the month.
Domestic fuel costs are primarily governed by the rand/dollar exchange rate and international oil prices.
In South Africa, the fuel price is adjusted on the first Wednesday of every month based on the two factors above.
FNB reported, however, that within the total price of fuel domestically taxes and levies make up 31%, with the General Fuel Levy and Road Accident Fund Levy accounting for the largest portion.
Rand
The rand has been on a downward spiral of late following allegations by the US ambassador that South Africa supplied arms to Russia, adding pressure to the already buckled currency.
On 12 May, the domestic currency reached its weakest point on record, at R19,47 to the dollar, but it has made a slight recovery to date.
Oil
Although the rand has tanked, international oil prices have been the main contributor to expected lower prices in June.
