The COVID-19 pandemic is affecting scores of people around the globe. South Africa is no different, with citizens enduring a five-week lockdown to curb the spread of the coronavirus.
However, with the end of the nationwide lockdown in sight, can South African motorists expect fuel prices to drop even further?
The Automobile Association (AA) says that in the wake of March’s fuel price reduction, South Africa is most likely set for another decrease for some fuel types.
“The irony is that this has come at a time where motorists and businesses are severely limited as to how they can use their vehicles,” says the AA in a statement.
According to the AA, the mid-month data shows petrol down by a massive R1.89 a litre, while illuminating paraffin dropping by R1.88 and diesel by R1.17.
The AA explains the factors which initially contributed to the plunge in oil prices prior to the COVID-19 pandemic resulting in several countries around the globe in lockdown; is resolved.
This includes the spat between Russia and Saudi Arabia, which has ended in an agreement. The agreement is expected to see global oil production reduced by nearly ten million barrels a day. This is in a bid to support oil prices.
The association adds that even the Rand’s vast crash against the US dollar, since March has not been enough to offset the steep decline in oil prices.
“The Rand has gone from an average exchange rate against the dollar of R15.65 on 2 March to its current level of around R18.25. In any other circumstances, a crash of 17% in six weeks would see South Africans facing a massive fuel price hike. Instead, we are set for another large drop.”
However, the AA emphasises the market remains highly volatile. They caution these figures may be very different by month-end.
“But as matters currently stand, when South Africans come out of lockdown at the end of April, fuel prices will be around three Rand a litre lower than when they went in,” the AA concludes.
What are your thoughts on the possibility of further decreases in fuel prices during the month of May? Share your thoughts and views with us in the comment section below.
