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What to expect from petrol prices in South Africa in January

Daily data published by the Central Energy Fund (CEF) indicates that fuel prices are going down across the board in the first month of 2024, affording motorists well-needed relief at the start of the year when finances are usually tighter than normal.

At present, the cost of one litre of petrol is expected to drop by as much as 76 cents and that of diesel by an even more substantial R1.41 come Wednesday, 3 January.

The major driver behind these anticipated adjustments is a consistent downtrend in international oil prices during December.

On 30 November, Brent Crude oil traded for an average of approximately $83/barrel on the open market, and by the 13th, it swapped hands for a noticeably lower $74/barrel.

This resulted in an over-recovery in local fuel prices of between 83-97c/litre for petrol and R1.57-1.64/litre for diesel, depending on the grade.

A depreciating rand negated a portion of these winnings, unfortunately.

The rand/US dollar exchange rate rose from an average of around R18.55/dollar on 30 November to R18.90/dollar by the 13th of December, subsequently tacking between 20-23c/litre back onto fuel costs in South Africa.

Taking into account these inputs, fuel prices in January 2024 are expected to be adjusted as follows:

  • Petrol 93 – Decrease of 63 cents a litre
  • Petrol 95 – Decrease of 76 cents a litre
  • Diesel 0.05% – Decrease of R1.34 a litre
  • Diesel 0.005% – Decrease of R1.41 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.

What to expect in the new year

South African motorists can expect fuel prices to remain stable and potentially even drop a bit further during the first quarter of 2024, but should prepare for heightened prices at the pump for the remainder of the year, according to research and consultancy group PwC.

The rand is expected to continue its gradual depreciation against the greenback throughout the next 12 months, whereas projections show that global oil production will likely be cut by the OPEC+ nations early into next year, which will keep prices for the black gold afloat.

As such, PwC anticipates that after quarter one we will start experiencing a gradual increase in fuel prices once more, but on the bright side, they are not expected to go too far past the rates we saw throughout 2023.

The company estimates that by the end of 2024, petrol prices will be about 0.6% above where they are today, while diesel prices will be less than 1% below their current standings.

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