December petrol price hike likely as weak rand disrupts predictions
December petrol price hike likely as weak Rand disrupts predictions, according to IOL.
South Africans hoping for a small petrol price decrease in December may be disappointed, as the weakening rand threatens to reverse earlier predictions. While initial data indicated a possible drop in fuel prices, the latest figures reveal that the rand’s volatility is causing a shift toward higher prices for both petrol and diesel. The Central Energy Fund’s daily snapshot currently shows a marginal over-recovery for 95 Unleaded and 93 Unleaded, but with an under-recovery developing for both grades, prices could rise instead if this trend continues through the month.
Diesel prices are almost certain to increase in December, with both diesel grades currently averaging around 43 cents higher than anticipated. These numbers could still grow, putting further pressure on motorists. While petrol prices remain relatively stable, diesel’s inevitable rise highlights the challenges South African consumers face at the pump. The increase comes despite the price of Brent Crude oil remaining under the October average of $75, trading at $72.80 (R1,322) on November 21.
Petrol price movements likely to remain small
On the positive side, petrol price increases in December are expected to be minimal, with 95 Unleaded still priced R1.26 cheaper than it was in January 2024. Following the 25-cent increase announced in November, 95 Unleaded now costs R20.51 at the coast and R21.31 inland. Meanwhile, 93 Unleaded sells for R20.98 in inland regions, showing only modest changes in price. Despite the risk of a price hike, petrol prices are likely to remain stable in comparison to the volatility of diesel.
A major factor in the current fuel price outlook is the rand’s poor performance against the US dollar. As of November 21, the rand traded at R18.16 to the US dollar. Continuing its decline since breaking the $18 barrier on November 12. The Rand’s weakness, driven in part by uncertainty surrounding the US election and Donald Trump’s trade policies. Is contributing an additional 17 cents per litre to South Africa’s fuel price calculations. This depreciation poses a significant challenge, as it makes imported oil more expensive, which is then passed onto consumers.
What does this mean for South African drivers?
In summary, despite early hopes for a petrol price decrease in December. The combination of a weaker rand and potential global market changes suggest that prices may rise instead. Diesel will certainly see a price increase, while petrol movements are expected to remain small. As the rand continues to fluctuate, South African drivers will need to brace for higher fuel costs. Potentially making 2024’s fuel price outlook even more unpredictable.
Stay tuned with The South African as December petrol price hike likely.
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