Motorists could see another major decrease in the petrol price, by as much as R1.00, according to data from the Central Energy Fund for January 2019.
According to the CEF, as at 11 December, the petrol price was showing an over recovery of between 132 cents and 134 cents per litre for diesel.
This is how things currently stand:
- 93 Petrol – 132 cents decrease
- 95 Petrol – 134 cents decrease
- 0.05% Diesel – 153 cents decrease
- 0.005% Diesel – 156 cents decrease
- Illuminating Paraffin – 144 cents decrease
Consumers have had a torrid 2018, with petrol prices climbing to the highest point in history – more than R17 a litre in October.
December represented the first month of cuts since April.
Government is working on a plan to restructure the way the fuel price is calculated to avoid harsh increases, part of which is a speculated cap on the price of 93 grade petrol.
The plan is expected to be tabled in January.
This is how prices could look in the new year, based on the latest available data (inland prices):
|Fuel||December official||January expected|
|0.05% Diesel (wholesale)||R14.68||R13.15|
The drop in price is dependent on market conditions continuing along the same path to the end of the month – this includes a lower price for international petroleum, and the rand remaining stable.
While the global oil price does not necessarily directly influence the petrol price itself, it does have an effect on the cost of the international petroleum which we import.
Global oil prices have declined sharply from a peak of $87 a barrel in October . Global oil supply has outstripped demand over the last six months, inflating inventories and pushing crude oil to its lowest in more than a year at the end of November.
Brent crude is priced at around $60 a barrel, while US crude is down even further at just over $51 a barrel.
Looking ahead, however, oil-producing countries have agreed to cut supply to try and rebalance the market. The impact of this would only be felt in 2019, however.
The other component affecting the petrol price is the exchange rate between the rand and the dollar.
The rand has weakened against the dollar this week, moved by international political tensions relating to the Brexit, as well as the trade war between the US and China. It had firmed to around R13.55 earlier in December.
Locally, pulling out of recession in the previous quarter has strengthened the currency, but liquidity issues at state owned enterprises – particularly Eskom – has kept South African markets on the back foot. This has been balanced out by lower-than-expected US inflation figures, which caused the dollar to wobble.
“While business slowly winds down to enter the festive season, the global political landscape isn’t showing signs of the slowdown at all, with Brexit and the trade war still hanging in the balance ensuring a continuous oversupply of uncertainty,” said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.