A stronger rand has come to the rescue of South African fuel users, causing fuel prices to decrease with effect from Wednesday, says Meshel Muzuva, a senior finance and economics lecturer at private higher education institution MANCOSA.
However, consumers must remember there will always be the instability of local and global economies and this can affect fuel prices.
“International petroleum prices have been stable, and this has allowed the rand to leverage its recent strength. This has led to a lower contribution to the basic fuel prices on petrol, diesel and illuminating paraffin,” Muzuva said.
“The fuel price decrease will bring some relief to cash-strapped South Africans. Financially-burdened South African consumers can thus expect a breather in May from the series of fuel price increases earlier in the year and users of paraffin will be delighted with the news as we are approaching cold winter months.”
The price of petrol is set to come down by nine cents per litre and diesel will decrease by 31 cents a litre. The price of illuminating paraffin (SMNRP) will decrease by 30 cents.
“The impact of the decrease in the price of paraffin will result in poorer households witnessing a decrease in their cost of living. Consumers will also benefit from the lower prices of transport and fuel and this will effectively increase their disposable income and enable them to spend more on other goods.”
Muzuva warned, however, that the ongoing instability in both local and global economies may point to future uncertainty around petrol prices in the coming months.
“Global financial markets do impact the rand, so the weakening of the rand in future could push the fuel price further to unsustainable levels and bite the little income at the disposal of households.”