Despite the across-the-board fuel reduction announced by the Department of Mineral Resources and Energy (DMRE) on Wednesday, 3 January, the Automobile Association (AA) calls for further fuel price reviews.
Minister Gwede Mantashe announced that petrol is set to drop by between 68 and 71 cents a litre, with diesel down by between 67.8 and 69.8 cents a litre. Illuminating paraffin will be lower by 95 cents. These prices will be adjusted at midnight on Tuesday and are effective from Wednesday, 5 January.
According to the AA, net oil prices for December have also been more favourable. "Benchmark international oil prices were mostly flat through the first three weeks of December, although they climbed back above $70 a barrel on concerns over the impact of the Omicron variant.”
The association said that with the Covid-19 Omicron variant resulting in considerable infection rates in the Northern Hemisphere, the possibility of lower consumer and industrial demand for petroleum products may follow, as was seen in the initial waves of Covid-19 in 2020.
"This could lead to a depressed oil price in the short-to-medium term. If so, that would bring some relief to South African fuel users. However, this should not distract from the fact that the current fuel prices are still far in excess of what South Africans were paying just a few months ago.”
The AA said: “We were pleased that our calls in this regard have reached the ears of the Minister of Finance, Enoch Godongwana. We welcome his comments that the fuel price structure needs a critical re-look, and we call on him to make quick work of this issue ahead of his 2022 Budget Speech in February.
“Apart from not increasing the existing levies on fuel at all during that speech, we would also like to see an announcement on concrete plans to review fuel prices before the end of the second quarter.”
BUSINESS REPORT ONLINE