When fuel is cheap, the benefits extend far beyond what motorists feel at the pump. Lower prices can rapidly translate into reduced overall costs across many African countries, where road transport is essential for moving workers, food and goods over long distances.
South Africa offers a recent illustration. According to Reuters, fuel prices in the country fell significantly between June and July, contributing to a slowdown in annual inflation, which eased from 5% in June to 4.3% in July. Petrol prices dropped 7.1% during that month, helping to deliver the first decline in inflation in five months.
Lower petrol prices reduce the operating costs of private cars, taxis, buses and delivery trucks. Transport companies gain greater room to keep fare and delivery service prices in check, providing some relief to passengers and businesses alike.
Falling transport costs also benefit the entire supply chain. Farmers, wholesalers and retailers can move goods at lower cost, easing some of the price pressure that ultimately reaches consumers.
For businesses that depend on vehicles, cheaper fuel translates directly into lower operational and logistics costs. Households, in turn, may retain a larger share of disposable income. When motorists spend less at the pump, they have more money available for food, housing, education and other essentials.
The same dynamic can apply to those who rely on public transport. Lower operating costs can relieve pressure on fares, although the extent of the impact depends on how fuel cost reductions are passed through to passengers.
African countries already grappling with a high cost of living therefore stand to gain considerably from cheaper fuel. Price reductions can act as a form of economic pressure valve, lowering transport costs, supporting business activity and giving households greater breathing room in their budgets.
Below are the ten African countries with the lowest fuel prices in August, according to data from Global Petrol Prices.
Compared with the previous month’s rankings — when the global average petrol price stood at $1.49 per litre, against $1.53 per litre in August — fuel prices in Libya, Algeria, Egypt, Tunisia, Niger and Gabon recorded marginal increases.
Fuel prices in Nigeria and Ethiopia, by contrast, declined slightly.
In Angola and Sudan, fuel prices remained unchanged.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=538543
