Fuel price drop to bring little relief

JOHANNESBURG – Economists say South African households are still battling and the drop in the petrol price will bring little relief.

The Department of Energy announced on Friday that the petrol price will go down by 28 cents a litre from Wednesday while the price of diesel will drop between 15 cents and 17 cents a litre

Paraffin will also go down to 16 cents a litre.

This is the second month in a row that the fuel price has dropped, bringing much needed relief to consumers.

In October, the price of petrol dropped by between 19 to 20 cents per litre while diesel decreased by two cents and illuminating paraffin by five.

While this is a slight relief, Gauteng motorists are now expected to start paying for the e-tolling system which is due to be launched before the end of the year.

Economist Chris Hart said households are under substantial pressure as a result.

“While it has been a little bit of a relief, it’s not a major relief. Households are under quite a bit of pressure at the moment because of a variety of costs.”

Debt counselling firm, Debt Rescue, has welcomed the drop in the fuel price saying it was long overdue.

But Debt Rescue CEO Neil Roets said people mustn’t see this as an invitation to go spend money.

“Although this is going to help them, it’s not going to get them out of debt so people must still be weary and stick to their budgets.”

Economist Dawie Roodt warned consumers that this doesn’t mean the food prices will also drop.

“In fact, the recent increases we’ve seen in the petrol price haven’t yet filtered through to the rest of the price increases in the economy, so the drop will help, but it’s not going to help that much.”

Earlier this week, the South African Petroleum Retailers Association (Sapra) said it expected fuel prices to be stable until the end of the year.

Fuel prices have steadily increased throughout this year with the biggest hike in July when the cost of petrol was increased by 84 cents per litre.

But the association’s Gerrie Lewies said he did not expect a major change in the price over the next two months.

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