What to expect from petrol prices in South Africa in January

Motorists are in for a mixed bag when they refuel their cars in January, with increases and decreases in the cost of both petrol and diesel.

The latest data from the Central Energy Fund (CEF) indicates that prices could go up by around 5c per litre, or drop by 2c per litre, depending on the grade of fuel used.

Fluctuating results

Things got off to a rough start in December with price hikes of between 17c and 55c per litre for diesel and petrol.

However, market conditions have since improved with the rand appreciating against the US dollar, falling below R18.00/dollar towards a more favourable R17.84/dollar.

The stronger rand was motivated by better-than-expected inflation data released this week, as well as a weaker dollar due to higher US Treasury yields.

South Africa’s consumer inflation came in at 2.9% in November, up only 0.1 percentage points from October, beating market expectations of a higher climb to 3.1%, according to BusinessTech.

While economics expect inflation to climb over the next few months, the good news is that it will likely fall below the South African Reserve Bank’s target of 4.5%.

As for the global price of oil, Brent crude has settled at around $73 per barrel for the time being, which is good news considering that it was at one point trading at over $90 per barrel earlier this year.

The relatively stable price of oil is attributed to slowing international demand, particularly from countries like China.

Based on these market indicators, fuel prices in South Africa in January are expected to be adjusted as follows:

• Petrol 93 – Increase of 5c a litre
• Petrol 95 – Decrease of 2c a litre
• Diesel 0.05% – Decrease of 1c a litre
• Diesel 0.005% – Increase of 2c a litre

It must be noted that these predictions are not the official changes that will be made by the Department of Energy next month, which may be higher or lower as they also take into account any potential changes in the Slate Levy, taxes, transport costs, or wholesale and retail margins.