Motorists can expect further good news at the pumps with the price of fuel expected to decrease in February amid a stronger local currency against the US dollar.
It comes after a decrease in January following five consecutive months of increases to the end of 2017.
Independent economist Fanie Brink noted that the rand has continued to firm against the dollar over the past few weeks, performing particularly well since the election of Cyril Ramaphosa to the position of leader of the ruling party, the ANC in December.
There is also some expectation that current president of South Africa, Jacob Zuma may be forced to step down early, which would be seen as investor positive.
Brink said that the strong rand has outweighed a sharp rise in the Brent crude oil price, the international benchmark for oil prices.
According to the latest information by the Department of Energy, the prices of gasoline 93 (ULP & LRP) in Gauteng could decrease by 36.9 cents per litre, while the price of diesel with a 0.005% sulphur content could decline by 22.5 cents per litre on Wednesday, 7 February 2018.
Brink said that an agreement between the members of the Organisation for Petroleum Exporting Countries and Russia, which is not a member of the organisation, to further reduce their production until the end of 2018, as well as a higher international demand, has pushed the oil price from $63 a barrel to almost $70 a barrel during the past month.
Due to this rise in the crude oil price, the average international gasoline price may increase by 6.2 cents per litre in February, with the price of diesel up by 23.3 cents per litre.
The average daily exchange rate has strengthened from R/$13.46 to R/$12.36 over the past month and can result in a decline of 43.1 cents per litre in the price of gasoline and 45.8 cents per litre in the price of diesel, the economist said.
The final price changes will be announced by the Minister of Energy by the end of the month.
Here are the expected adjustments (inland prices)
|Fuel||January official||February expected|
|0.05% Diesel (wholesale)||R12.74||R12.51|