JOHANNESBURG - 2021 is looking set for a bleak start as far as travelling costs go, with mid-month data from the Central Energy Fund currently pointing to relatively substantial increases for both petrol and diesel from the beginning of January.
According to the Automobile Association, diesel prices will be hit the hardest, with current data pointing towards an increase of 52 cents a litre, while petrol is looking set to rise by at least 34 cents a litre. We say at least because the latest daily data is showing a deficit of more than 50 cents for petrol, although the month average is currently at 34 cents.
A litre of 95 Unleaded currently retails for R13.76 at the coast and R14.46 inland, where the cheaper 93 ULP sells for R14.26.
The big culprit this month is international oil prices, while the rand has actually worked in our favour slightly as the AA explains:
"It's been a good month for the rand so far, with the local currency picking up around 15 cents against the US dollar, but the basic fuel price has shot up since the start of December, raising the spectre of quite substantial fuel price rises if there isn't a pullback before month end," the AA said.
The association added that the increases come despite significant global refining overcapacity, and a slight increase in the worldwide oil supply alongside falling demand. Furthermore, optimism regarding an effective Covid-19 vaccine could also push prices up.
"Although the IEA does not expect a significant impact before the second half of 2021, we would not be surprised if optimism over the vaccine has been behind recent oil strength. Further strength might be on the cards if the vaccination plan shows large-scale effectiveness," the AA added.
At the time of writing, the rand was trading at R15.03, which is one of its strongest levels since the Covid-19 pandemic hit, but oil prices remained stubbornly high, with Brent Crude trading at R50.31, which is more than double what it traded for after the crash earlier this year.
As a result of all the turbulence, it has been a see-saw year for South African fuel prices, however it is still significantly cheaper to fill up than it was in January this year, when a litre of 95 Unleaded petrol cost R15.52 at the coast.