The Central Energy Fund’s unaudited data for fuel prices in December currently indicate slight decreases to petrol prices, but industry margin adjustments could lead instead to price hikes.
According to the Automobile Association, baseline unaudited figures released by the Central Energy Fund (CEF) for fuel prices in December are currently pointing to a decrease of around seven cents a litre to ULP93, and a slight increase of three cents to ULP95. However, the AA cautioned that adjustments to industry margins could see prices of both fuels increase for the period.
This is because the Regulatory Accounting System (RAS) – the guideline for the fuel industry that determines margins for petrol at wholesale, retail, and secondary storage and distribution levels – could offset any gains and add to under-recoveries for petrol prices.
“It’s probable that the annual margin adjustments could also have a negative impact on the expected increase of around 48c/l to diesel, also pushing this fuel price higher. The expected increase of around 43c/l for illuminating paraffin will also not come as good news for users of this fuel in December,” the AA said.
However, the full impact of including the RAS adjustments will only be known when the Department of Mineral Resources and Energy makes the official fuel adjustment announcement this week.
Apart from the margin adjustments, the mixed outlook for fuel prices can be attributed to fluctuations in the international product prices of unleaded fuel since mid-November. Additionally, the depreciation of the rand against the US dollar at the beginning of the month has added to the under-recovery of fuel prices.
The AA said that the increases in diesel prices would have negative consequences for all consumers, as higher input costs would likely lead to increased prices at stores. However, the association said that while motorists’ travel plans would be dampened by price increases, they were unlikely to result in large-scale changes to plans.
