The Minister of Mineral Resources and Energy, Gwede Mantashe, announced at the weekend the adjustment of fuel prices, which is based on local and international factors.
While petrol users would enjoy a happier new year for paying less, diesel vehicle owners would have to brace for a price hike of nine cents per litre.
Mantashe said: “The main reason for the fuel price changes is that the average Brent crude oil price increased from $63 to $66.71 per barrel during the period under review.
“The crude oil prices increased following signals of the extension of Organisation of the Petroleum Exporting Countries (Opec) production cut into mid-2020, and signs of a new round of trade talks between China and the United States of America.”
The adjustment, with effect from January 1, is as follows: 93 octane petrol (ULP and LRP) is expected to decrease by 4 cents a litre in retail price, while 95 unleaded and lead replacement petrol decreases by 14 cents a litre in retail price. Both grades of diesel 0.05% and 0.005% sulphur will increase by 9 cents a litre increase in wholesale price, costing between R14.62 to R14.08.
Illuminating paraffin (wholesale) will increase by 5 cents a litre, while the maximum LPG retail price will decrease by 24 cents a kilogramme.
However, an economist said that with the shrinking economy there was very little for South African consumers to feel cheerful about.
Dawie Roodt, chief economist of the Efficient Group, an integrated JSE-listed financial services company in Pretoria, said: “Unemployment is at an all-time high, and yet another downgrade from a ratings agency almost certainly is waiting for us in January, so there is very little to feel cheerful about this festive season.
“I am fearful that we are heading towards a full-blown recession and, in fact, may already be in one in the fourth quarter.”
He said things could get a lot worse before they get better.
“Given the devastation brought by load shedding and the government’s rapidly growing debt burden, the all-time high fiscal deficit is going to make it increasingly difficult for the government to borrow money abroad to keep the economy going,” said Roodt.
The fuel prices schedule for the different zones will be published on Monday.