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By Palesa Matlala
- Central Energy Fund data shows petrol could drop R2.87 a litre in July, but Treasury removes a R1.50 levy the same day.
- Economist Maarten van Doesburgh warns that any new fighting involving Iran could send oil prices up and wipe out the expected savings entirely.
Fuel prices are dropping in July. But the saving at the pump is not as large as the headline numbers suggest.
The Central Energy Fund, the state body that tracks daily fuel price factors for the Department of Mineral and Petroleum Resources, is showing a market over-recovery of up to R2.87 per litre for petrol and up to R4.92 per litre for diesel. That is the drop in global oil costs passed on to South African motorists.
But on 1 July, the government is also removing the temporary fuel levy relief it has been running since fuel prices last spiked. That means motorists will pay an extra R1.50 per litre on petrol and R1.96 per litre on diesel in tax from that date.
Once that levy is subtracted, the net saving at the pump is roughly R1.32 to R1.44 per litre for petrol 93 and 95. Diesel users do better. Diesel 0.05% drops by roughly R2.57 to R2.61 per litre. Diesel 0.005% drops by up to R3.01 per litre.
Economist Maarten van Doesburgh said the savings could still disappear before July arrives.
“The minute there is more hostility, markets react very quickly. If tensions increase again, we could immediately see fuel prices rising,” he said.
The easing of tensions between the United States and Iran has driven down global oil prices in recent weeks. Van Doesburgh said if that changes, motorists should not expect another government subsidy to soften the blow.
The Department of Mineral and Petroleum Resources will confirm the official July pump prices at the end of June. Final figures are published on the first Wednesday of each month.
Pictured above: Motorists could see fuel price relief in July, though a returning government levy will reduce the saving at the pump.
Image source: File
