Department of Mineral Resources promises sizeable reduction in fuel prices

Estimated reading time: 2 minutes

Can South Africans expect a notable reduction in fuel costs in August 2022—offering relief to cash-strapped Newcastillians?

The Department of Mineral Resources and Energy (DMRE) issued a statement today, stating that it has welcomed the reduction of international petroleum product prices, including crude oil prices.

According to the Department, as of the close of business on Monday, 25 July 2022, the price of Brent Crude Oil was hovering around 105 US Dollars per barrel. This was a reduction of approximately 10% compared to the average price for June 2022.

With this said, the DMRE noted that over the past four months, the Government has attempted to cushion South Africans from the vagaries of the oil market and the full impact of the high international oil prices.

“A temporary reduction in the general fuel levy of R1.50 per litre was introduced from 6 April to 5 July 2022. This was reduced to 75c per litre from 6 July 2022 to 2 August 2022,” stated the Department.

Despite this reprieve coming to an end on 2 August 2022, the Department confirmed that there will be a reduction in fuel prices, including paraffin.

“A formal announcement in this regard will be made by the end of the week,” confirmed the DMRE.

Additionally, the Department reaffirmed that the consultation on the introduction of the price cap for 93 Octane fuel has formally been initiated.

The Newcastillian – Online News reported on the matter on 26 July 2022. To read the full article, click here.

Furthermore, the DMRE highlighted, “This price cap will allow for fuel suppliers who can pass the benefit to the consumer, can do so.”

According to the Department, no disruptions are expected in the fuel market as 93 Octane accounts for a small portion of the market. However, this will allow the Department to monitor how the market will react to the capping of the price.

What are your thoughts on the above-mentioned? Share your views in the comment section below.

Leave a Reply

Your email address will not be published.