<strong>By: Sanisha Packirisamy, economist at Momentum Investments</strong>

<h2>What does this mean for your pocket?</h2>

These days filling up your car’s petrol tank can be quite an emotional experience – and not in a good way. But South African motorists will be pleased to hear we will be enjoying some reprieve at filling stations when the price of fuel is lowered at midnight on Tuesday, 02 July 2019. Petrol is expected to drop by 86 cents a litre, diesel by 68 cents, and illuminating paraffin by 58 cents.

<h3><strong>Why does the fuel price go up and down?</strong></h3>

“The price of fuel in South Africa is set monthly by state-owned entity, the Central Energy Fund. It’s based on a number of factors, including international petroleum prices, which are linked to the supply and demand of crude oil, the rand/US dollar exchange rate, and the cost of distributing petrol in South Africa – which includes the cost of ensuring fuel gets from the oil tankers to your car,” says Sanisha Packirisamy, economist at Momentum Investments. “This fluctuation has to do with lower international fuel prices in June.”

<h3><strong>South Africans are spending more on fuel than on cars, new sale statistics show.</strong></h3>

“As a nation – we spend a lot on fuel. In fact, according to the latest motor trade sales figures from Statistics South Africa, we’re spending more on fuel than on cars,” says Packirisamy. “While petrol price drops offer some financial reprieve, it’s a good idea to prepare for potential fuel fluctuations by determining how much money you currently spend on petrol, and set aside about 10% of this value each month as a buffer against future increases.”