Cape Town — It’s good news and bad news for South African motorists in December as there are expected decreases and increases across different fuel grades.
The Automobile Association (AA) revealed that the latest unaudited data from the Central Energy Fund (CEF) found that petrol prices are expected to decrease slightly, while diesel and illuminating paraffin are expected to increase, TimesLIVE reported.
According to the CEF data, the 95 unleaded price is expected to decrease by 5 cents per litre, while 93 unleaded was set to decrease by 16 cents per litre. Meanwhile, the price of diesel is expected to increase by 38-40 cents per litre, while illuminating paraffin will increase by 39 cents per litre.
“Although the rand/US dollar exchange rate was stable in the first two weeks in the period under review, the rand weakened slightly against the USD after the US presidential elections, resulting in a less substantial decrease for all grades of petrol,” the AA said
It added that the international petrol prices have been on the decline for a while, hence the expected petrol price decrease for December. However, it added that the mid-month data was likely to change ahead of the final confirmation at the end of November before the adjustments occur on 4 December.
The AA also urged drivers to plan for December and January trips now to ensure vehicles are ready for the long road.
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According to BusinessTech, the Department of Mineral Resources said the daily snapshots are not predictive and do not encompass other modifications including slate levy adjustments or retail margin changes.
The rand/dollar exchange and international oil prices determine domestic fuel costs. The rand endured a tough start to November, especially due to Donald Trump’s election as US President.
Economists anticipate that Trump’s policies will fuel inflation and lead to possible interest rate hikes further down the line, while the threat of a reignited trade war with China and mass deportations hang over global economics.
The rand moved from around R17.50 at the start of the month and broke through R18.00 to the dollar this week—ending up weakening even further to around R18.30 by the end of it. Economists say that the currency is likely to remain volatile.
Oil prices have moved in the other direction as prices started high and came down. Oil was trading at $75 a barrel and now sits at $71 a barrel. The turn in oil prices has resulted in an over-recovery for petrol, between 13 and 23 cents per litre.
However, there is still an under-recovery for diesel at around 28 cents per litre, but this is much lower than the 50+ cents per litre under-recovery at the start of the month.
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Compiled by Matthew Petersen
