Amidst the fluctuating Rand and apprehensions surrounding shipping routes in the Red Sea, fuel prices are poised for a decrease as the Department of Mineral Resources and Energy prepares to make adjustments next Wednesday, 3 January 2024. This is according to the Automobile Association (AA).
Analysing unaudited data from the Central Energy Fund (CEF), the AA has indicated that fuel prices are likely to see a reduction across the board.
According to CEF’s figures, ULP95 petrol is expected to decrease by approximately 54 cents per litre, while ULP93 is anticipated to drop by around 39 cents per litre. Diesel prices are set to experience a substantial decline, ranging between 94 cents per litre and R1.02 per litre, and illuminating paraffin is projected to decrease by approximately 95 cents per litre.
According to the AA, oil prices stabilised as major shippers resumed passage on Wednesday, 27 December 2024, countering previous disruptions that had driven oil prices higher. Nevertheless, the primary driver behind the anticipated decreases remains the downward movement in international oil prices, with the average Rand/US dollar exchange playing a lesser role but still contributing to the expected reductions.
“While we anticipate lower fuel prices in January, we remain concerned about the overall high prices impacting all consumers. If the expected decreases materialise, petrol prices will still surpass January 2023 levels, but diesel prices will be marginally cheaper. This must be considered in the context of consumers recovering from steep fuel price hikes in September and October,” expressed the Association.
The AA further emphasised that despite the positive start for consumers in 2024, it is premature to ascertain if the trend towards lower prices will persist, particularly given current geopolitical developments influencing international oil prices.
“For this reason, a sustainable solution to mitigate rising fuel costs is still necessary. Until such a solution is found, citizens will remain at the mercy of fuel price hikes. We once again urge the government to urgently initiate a transparent review of the fuel pricing structure to seek this solution,” stressed the AA.
The AA noted that changes to this data are expected before the formal announcement by the Department of Mineral Resources and Energy (DMRE) ahead of the upcoming Wednesday’s adjustment. However, any relief at this stage is welcomed.
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