Fuel price set to drop in January

The outlook for 2024 is promising, as the Automobile Association (AA) anticipates a favorable start with a projected decrease in fuel prices next month. According to the AA, relying on unaudited data from the Central Energy Fund (CEF), there is a likelihood of a 54 cents per litre reduction in the price of 95 unleaded petrol, and diesel prices are expected to decrease by approximately 94 cents/l to R1.02/l. Illuminating paraffin is also foreseen to experience a drop of around 95 cents/l.

In practical terms, this could translate to a cost of R22.71/l for 95 inland and R21.99/l at the coast. Meanwhile, 93 could be priced at R22.40/l inland and R21.68 at the coast. Diesel prices may soon range between R21.05 and R20.79 per litre.

The AA attributed these anticipated reductions to the stabilization of oil prices, with some major shippers resuming passage after recent disruptions. While the average Rand/US dollar exchange rate plays a smaller role, it still contributes to the expected decreases.

Despite the positive forecast, the AA highlighted the lingering impact of high fuel prices on consumers, emphasizing that even with the expected decreases, petrol prices would remain higher than those in January 2023. Diesel prices, however, are anticipated to be marginally cheaper than they were at the same time.

Cautioning against overlooking the recent steep fuel price hikes in September and October, the AA urged the government to initiate a transparent review of the fuel pricing structure to address the concerns of consumers. Changes to the projected petrol price are anticipated before the formal announcement by the Department of Mineral Resources and Energy (DMRE) next week.