Cheaper petrol price forecast for December, but 2021 could see increase
JOHANNESBURG - South Africans can look forward to slightly cheaper petrol for the holiday season, according to unaudited month-end fuel price data from the Central Energy Fund, however diesel prices are set to go up slightly.
According to the Automobile Association, the price of petrol is looking set to decrease by around 27 cents a litre from the first week of December, while diesel is set to increase by 13 cents. The price of illuminating paraffin will rise by about 22 cents a litre.
A litre of 95 Unleaded petrol currently costs R13.89 at the coast and R14.59 inland, where the cheaper 93 Unleaded is available for R14.39.
2020 has been a rollercoaster ride for fuel prices, with ULP 95 starting the year at R15.52 but dipping to as low as R11.52 at the height of lockdown in May, before shooting up to R14.42 just two months later as international oil prices rebounded on the back of easing Covid restrictions worldwide.
January could see prices rise
Unfortunately, the signs are currently not pointing towards a better fuel price picture in 2021. Oil prices have shot up in the past 10 days, which has caused South Africa’s fuel price equation to turn negative, although thankfully the more positive numbers earlier in the month have swung things in favour of a December decrease.
The South African rand has played strongly in our favour in the past month, appreciating from R16.30 at the beginning of November to R15.16 on the 27th. According to the AA, the rand to US-dollar exchange rate is the strongest it’s been since February this year.
"The fly in the ointment is that the international price of refined fuels has trended upward over the last ten days, so here's hoping it doesn't spoil the party,” the AA said.
“It has been a long time since a stronger rand was able to come to the rescue of South African fuel users, and if the current trend continues, the country seems set for improved fuel price stability as we enter 2021".
That, of course, also depends on the oil price continuing to trade below the $50 mark. At the time of writing, Brent Crude was trading at $47 a barrel. However, in late October, the World Bank said it expected international oil prices to average around $44 in 2021, which - assuming that the local currency played along - would certainly result in some fuel price stability for South Africans.