Johannesburg - Earlier this month, it appeared as if South Africans faced another significant petrol price hike, of about R1 a litre, but, thankfully, the outlook has improved.
This week has seen the daily petrol price data going back into the green, according to documents released by the Central Energy Fund (CEF), with over-recoveries in the region of 50 cents a day. While an over-recovery would normally lead to a fuel price decrease at the end of the month, the fuel price equation has been in a state of under-recovery for most of November, meaning we’ll probably still see a price hike in December, albeit a much smaller one than anticipated.
According to the latest unaudited CEF data, the month average points to an increase of 62 cents a litre for 95 Unleaded petrol and 52 cents for 93 ULP. However, if current trends persist between now and the end of the month, it’s possible the price increases will fall below 30 cents.
Significant diesel decrease coming
It’s much better news for diesel prices, with the month average pointing to a decrease of R1.12 for 500ppm and R1.05 for 50ppm. However, with the latest daily data showing an over-recovery in the region of R3, a decrease of R1.70 or more is certainly possible if international prices remain at their current level. If that happens, January could see further diesel price cuts, which would be good news for general inflation.
The price cuts can’t come too soon as diesel prices are at record highs after a year of brutal increases.
The usual disclaimer applies. These projections are based on official but unaudited data, and movements in the currency and oil prices could change the outlook between now and the end of November.
These factors have worked heavily in our favour for the second half of November, with international Brent Crude oil prices having retreated from $96 a barrel to around $86, at the time of writing, and the rand has appreciated from R17.30 to R16.96.
We do hope these trends continue into December.
South Africans are paying R22.22 for a litre of 95 Unleaded petrol at the coast and R22.87 inland, where 93 costs R22.57. The wholesale price of unregulated diesel is listed at R25.11 at the coast and R25.74 inland, but retail prices are somewhat higher than that and differ between outlets.