Transporters and trade unions have welcomed the latest significant drop in fuel prices as a “move in the right direction”, providing relief to businesses and consumers at the start of the new year.
Minister of Energy Gwede Mantashe announced the latest fuel price adjustments earlier this week, which came into effect on Wednesday, January 3, following a decline in international crude oil and petroleum product prices, mainly due to a boost in production by the United States, Venezuela, Guyana, and other non-Organization of the Petroleum Exporting Countries despite its announcement to cut production.
The price of petrol (93 ULP and LRP) decreased by 62.00 c/l to R22.17 per litre at the coast and R21.45 per litre inland, while the price of petrol (95 ULP and LRP) declined 76.00 c/l to R22.49 at the coast and R21.77 inland. The price of diesel (0.05% sulphur) dropped by R1.18, bringing the inland price to R20.63/l and the coastal price down to R19.91, while the price of diesel (0.005% sulphur) declined by R1.26 per litre to R20.73 per litre inland and R20.04 per litre at the coast.
Road Freight Association CEO Gavin Kelly said the latest price decreases provided transporters and consumers with some relief to start 2024 on a positive note.
“The Road Freight Association (RFA) welcomes news that diesel has dropped by around R1.20 per litre and petrol by around R1.60. While this is not a plummet, it is definitely a move in the right direction,” Kelly said.
He added that the latest decline in fuel prices, which has followed a series of price drops over the past year, would serve to ease pressure on the economy “ensuring that interest rates should remain steady, with possible easing towards the middle of 2024.
“For the road freight transporter, relief on guarantees for fuel, and some possible easing on prices will ensure better operating margins. All in all for everyone, a chance for a breather while other important aspects of road freight transport can be attended to,” Kelly said.
However, the association is still concerned about global factors that place pressure on petroleum-based fuels as these continue to see-saw in a pendulum motion.
“At the moment this seems to be pushing fuel prices down. As for South Africa, the biggest effect we need to change is the value of the rand vis-à-vis the dollar in which currency we currently purchase petroleum based fuel products,” Kelly said.
Abigail Moyo, spokesperson for the trade union, the United Association of South Africa (Uasa), welcomed the price decrease.
“While it is pleasing to see a fuel price decrease pattern favouring consumers, last year’s knock-on effect of fuel prices still pinches consumers, with petrol prices higher than in January 2023. We hope the decrease will help parents juggle between resuming work and their children’s back-to-school needs,” Moyo said.
“Uasa urges the government to put consumers’ needs first in 2024 and create a sustainable and transparent structure for fuel price reviews.”
