File picture: Motorpress.

Johannesburg - Following December’s record fuel price drops of R1.84 a litre for petrol and R1.45 for diesel, South African motorists are in for even more savings at the pumps from the first week of January.

According to the Automobile Association, month-end unaudited fuel price data from the Central Energy Fund is pointing to a petrol price reduction of around R1.00 a litre, with diesel set to fall by R1.30 and illuminating paraffin by R1.22.

This would bring the price of a litre of 93 Unleaded down to around R14.01 in Gauteng, with 95 Unleaded retailing at R14.24, while those at the coast are likely to pay around R13.65 for 95.

These reductions will largely be the result of significantly lower international crude oil prices, which were hovering around $53 a barrel in late December, down from four-year highs of $86 in October.

The lower oil prices have been largely spurred on by the USA which is trending towards becoming a net exporter of oil, says the AA.

“Should this ever come to pass, the power of the OPEC nations to influence petroleum prices would be reduced considerably, leading to increased oil price stability," the association added.

However, the South African rand remains a risk factor, given the volatility seen in 2018, and the huge task that lies ahead in stabilising the economy and managing government debt.

"Our outlook for 2019 is that South Africa's economic fundamentals and investor confidence which influences the rand will be the biggest factors affecting fuel prices," the AA concluded.

IOL Motoring