No festive cheer expected at the pumps, warns AA

While baseline unaudited figures from the Central Energy Fund for fuel prices in December indicate a decrease of about 7c a litre for ULP93 and a slight increase of 3c/l for ULP95, adjustments to industry margins could see prices of both fuels increase.

The Automobile Association (AA) said that while motorists’ plans will be dampened by increases, they are unlikely to result in large-scale changes to holiday travel plans of those embarking on long year end journeys.

The Regulatory Accounting System (RAS), the guidelines for the fuel industry that determine margins for petrol at wholesale, retail and secondary storage, and distribution levels, could offset any gains and add to under-recoveries for petrol prices.

The full impact of the inclusion of the RAS adjustments will only be known when the department of mineral resources makes the official fuel price adjustments on Wednesday.

“It’s probable the annual margin adjustments could also have a negative impact on the expected increase of about 48c/l for diesel. The expected increase of about 43c/l for illuminating paraffin will also not come as good news for users of this fuel in December,” said the AA.

Apart from the margin adjustments, the mixed outlook for fuel prices can be attributed to fluctuations in the international product prices of unleaded fuel since mid-November. Additionally, the depreciation of the rand against the US dollar at the beginning of the month has added to the under-recovery (increase) of fuel prices. 

The AA emphasised the increases in diesel prices will have negative consequences for all consumers because higher input costs are likely to lead to increased prices at stores.

“We urge consumers to monitor their fuel use closely and to budget according to the new fuel prices, which will take effect at midnight on December 3.

“Ensuring vehicles are well maintained, carefully planning routes and avoiding heavy traffic whenever possible are some strategies motorists can use to improve fuel consumption.”