When Will Fuel Prices Go Down In South Africa?
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With the price of fuel going up in South Africa at an alarming rate, many South African motorists have been on edge as to when the fuel cost in their country will finally go down. Now that we have approximated that the price of diesel will drop by September, we can only assume that once the supply issues have been resolved and with new refineries coming online, the prices of all petroleum products will go down across the board. But while many say it will never happen, this article will present you with evidence to the contrary. The question is: Are you ready for a future where your car doesn’t require a full tank of fuel every time you want to drive it? And if so, when?
Why The Price Of Fuel Will Go Down In South Africa
As the industry awaits the arrival of new refineries, there is a lot of optimism, particularly in the country’s agricultural sector. The reason is that while these refineries will be able to produce fuel, they will also be able to grow food crops that will be used as feedstock. The result? A decrease in the price of fuel, as the new refineries will require less of it to produce the same amount of food. At the same time, the drop in the price of crude oil, which has been the most significant contributor to the increase in the price of fuel in South Africa, will positively affect the drop in the price of fuel.
New Refineries Coming Online
Since the start of the year, there have been reports of at least three new refineries coming online in the country. With most of the issues surrounding the expansion of the Sasol plant having been resolved, we can expect new refineries to be up and running shortly. The first is the BP Biofuels Refinery, which will be operational by the end of the year. Other reports claim that a new refinery owned by Heineken is also making good progress, resulting in the refinery being up and running by October. The arrival of these new refineries can significantly affect the country’s fuel requirements. The reason? As a result of the decline in the use of diesel, the new refineries will be able to produce petrol and jet fuel, the latter of which is in high demand.
Demand Is Dropping Due To Economic Downturn
As we have seen in the United States and other markets in the Western world, when fuel prices go up, people tend to cut back on their fuel consumption. In South Africa, this is beginning to be reflected in data from the National Petroleum Agency. During the first three months of this year, demand for fuel in the country dropped by 0.4% compared to the same period last year. What’s more, this decline was driven by a decrease in demand for diesel, which fell by 3.3%. This decline in order is likely to continue, especially since the reduction in the use of diesel cars has been significant. With government initiatives to promote the use of hybrid cars and the declining affordability of diesel cars, we can expect to see a decline in demand for diesel shortly.
Government Initiatives To Increase Supply
To increase the overall capacity of the country’s refineries, the government has lowered the price of crude oil. This has resulted in more refineries looking to produce petrol, and with their increased capacity, they will be able to make more fuel. The result? The country will have at least 300 000 litres of petrol per day, as opposed to the current 200 000 litres per day. This, coupled with the new refineries, should see the price of fuel drop across the board.
Furthermore, the government has announced that it will invest in new refineries in the country. Once these new refineries are up and running, they will potentially significantly increase the country’s capacity to produce fuel. Overall, with the increased capacity from the new refineries and the power from the latest projects, the government will be able to produce at least 1.5 million litres of petrol and 2 million litres of diesel per day.
Conclusion
If there is one thing we can take away from all this, it’s that we are in uncharted territory when it comes to fuel in South Africa. That’s why everyone must prepare for a future where the price of fuel goes down. This might seem like a far-fetched idea, and we might even believe such a thing will never happen. But with the evidence we have presented, we hope you are now ready for a future where your car doesn’t require a full tank of fuel every time you want to drive it. And even if the fuel price doesn’t drop in your country, it is essential to remember that there are things you can do to save money when filling up your vehicle’s tank. This includes using your car only when you need to, knowing when it is time to change your engine, and keeping an eye out for cheap fuel offers.
