Proposal to cap petrol price to be finalised in January
The proposal to cap the price of 93 octane petrol would be finalised by the end of January, energy minister Jeff Radebe said on Wednesday.
“Before the end of January 2019 there will be a proposal on the table,” Radebe said during a question-and-answer session in parliament on Wednesday.
The government is looking to introduce measures to boost competition in setting the price of 93 octane petrol that could result in lower prices and shift higher numbers of consumers into using it rather than higher-octane 95.
The proposal has been circulated to the fuel wholesale and retail industries‚ which have been asked to comment on it.
“We are very serious about changing and putting a cap on 93 octane,” said Radebe. He said this would go a long way in alleviating pressure on consumers.
Meanwhile, after months of fuel price increases, the Automobile Association (AA) says the petrol price is expected to drop by about 16c/l in November while prices of diesel and illuminating paraffin will probably increase by about 30c/l .
“Fuel prices have moderated during October‚ with the prospect of some relief for petrol users‚ although users of diesel and illuminating paraffin will have to cough up more‚” the AA said on Wednesday‚ commenting on unaudited fuel price data released by the Central Energy Fund.
This is a welcome respite for consumers hit hard by seven successive months of rising fuel prices. While the government intervened in setting prices in September for the first time since the early 2000s, with a slight increase for the month, drivers faced a record-high fuel increase in October.
The fuel price is difficult to predict as the price of oil and the trajectory of the rand against the dollar — both of which are uncertain — are the two primary factors that influence the price monthly.
“The exchange rate started the month badly, but has since levelled out‚” said the AA. “The rand’s modest gains against the dollar have helped cushion the impact of rises in the landed price of fuel in the case of diesel and illuminating paraffin.”
The AA said the modest decline in international petroleum prices in the past month is “a cause for optimism”. It said that if the rand maintained its current trajectory of relative stability, it could augur well for fuel prices as the festive season approaches.
However, the AA cautioned against premature celebration as2018 “has been one of the most tumultuous years in history for South African fuel users, and the economy is still fragile and easily spooked”.