Expect a massive drop in the price of gasoline next week

Mbadive reductions in fuel prices are expected in December, but could be mitigated by adjustments to the retail and wholesale margin and the potential for continued use of the Slate tax.

According to the Automobile Association (AA), she commented on unverified data on gasoline prices released at the end of the month by the Central Energy Fund (CEF).

"The good news is a likely reduction in the price of gasoline from 1.85 euro per liter, with a drop in diesel estimated at 1.40 and a decrease in paraffin brightening of 1.28. With these expected declines, fuel prices will return to levels last seen around the middle of 2018, "said AA.

• The price of gasoline down R1.85 per liter.
• The price of diesel down R1.40 per liter.
• Illuminating paraffin falling from R1.28.

"These mbadive declines result from a combination of substantial declines in international oil prices and a slightly firmer rand, which has strengthened sharply against the US dollar since its most recent peak hit early. September, at around 15.50 rand from the greenback, "said the badociation. I said.

However, he warned that it is possible that all these decreases do not affect the motorist.

"The months of April, September and November were marked by adjustments of various taxes included in the structure of fuel prices. The December adjustment is due to, among other things, wholesale and retail margins, which could mitigate some of the decline. Last year, adjustments to these numbers were less than five cents per liter. "

"There is also the issue of the Slate Levy that may or may not be retained," said AA.

The slate tax is used to recover losses from under-recoveries in fuel prices when accumulated gasoline and diesel balances represent more than 250 million rand. At the end of September, the negative balance was R2,2 billion, which was apparently offset by the imposition of a 21.92-cent tax in November.

"If Slate Levy brings the slate balance back below the threshold by the end of November, it's likely to be reset. Otherwise, another Slate levy levy will apply for December, which will offset some of the drop in fuel prices, "said the badociation.

"The fuel pricing outlook for 2019 remains uncertain, but we hope that some stability will come back," he said.

The Ministry of Energy has the last word on the evolution of the price of gasoline and will announce the official changes at the end of the month. Here are the expected changes based on the latest CEF data:

Read: South Africa could experience its biggest gas price reduction in December