According to the Central Energy Fund (CEF), both grades of petrol will decrease by R2.04 per litre, while diesel will decrease by 56 cents.

The Automobile Association (AA) has welcomed these price decreases as it will provide some relief for motorists. The implementation is set to take place from Wednesday, 7 September 2022.

An economist from the North West University (NWU), Waldo Krugell explains which factors play a role in determining the increase or decrease of the petrol price in South Africa:

What are the major factors that contributed to the fuel price decrease?

“The decline in international oil prices played a major role in the decrease of the fuel price. The two main drivers are the price of crude oil and the rand/dollar exchange rate. The price of crude oil decreased in August but unfortunately the rand/dollar exchange rate has also been down in August, meaning our savings could have been higher had the rand been stronger against the dollar.”

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What does this mean for the economy of South Africa?

“It is good news for South Africans. For ordinary households it means your fuel spending is going to be less and you can use the money for other necessities. It is also a good thing for inflation - if there is an increase in transport costs, it makes other products more expensive. That pressure has now been lifted.”

Does the decrease in fuel mean a decrease in other products?

“A decrease in the fuel price usually means a price decrease for other products, however, it takes time to get to that point. When transport costs are less, eventually the costs of goods and services will also decrease.“

What does the petrol price decrease mean for fleet business owners?

“Fleet businesses will also benefit from a lower fuel price. It will help their businesses to thrive as the benefits of a lower petrol price will extend to their customers.”

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