Here is the expected petrol price for January

Mid-month data from the Central Energy Fund (CEF) points to more good news than bad for fuel prices in the country in the new year.

As has been the trend for much of December, duel recoveries have been largely balanced, swinging into under-recovery and over-recovery territory as the rand/dollar exchange and global oil markets fluctuate.

A rand under R18.00/$ and oil prices bound to a narrow range under $75 a barrel have kept things stable, with an over-recovery for Petrol 95, diesel and illuminating paraffin.

Petrol 93 is currently the only fuel type lining up for an increase.

These are the current projections:

• Petrol 93: increase of 7 cents per litre
• Petrol 95: decrease of 1 cent per litre
• Diesel 0.05% (wholesale): decrease of 5 cents per litre
• Diesel 0.005% (wholesale): decrease of 3 cents per litre
• Illuminating paraffin: decrease of 15 cents per litre

he CEF does not present daily snapshot data for LP Gas.

The Department of Petroleum and Mineral Resources has noted that its daily snapshots are not predictive and do not encompass other possible modifications, such as slate levy adjustments or retail margin changes.

The department determines these adjustments, considering various factors, at the end of the month.

Domestic fuel costs are primarily governed by the rand/dollar exchange rate and international oil prices. In South Africa, the fuel price is adjusted on the first Wednesday of every month based on these two factors.

So far in December, oil prices are leaning in favour of lower prices, contributing to an over-recovery. The relatively weaker rand/dollar exchange is pushing the under-recovery.

Rand/Dollar

The rand experienced a decent boost last week as local inflation data came in cooler than expected and the dollar weakened as markets anticipated another interest rate cut in the US to close off the year.

However, weaker local data contained in the South African Reserve Bank’s latest quarterly bulletin last week dented that strength somewhat, pushing it back over R17.80 to the dollar.

The SARB flagged declining foreign investment in the last quarter versus the previous one, while also highlighting continued strain on households.

As industries settle down for the festive and holiday period, and most final data releases for the year already out, markets are likely to be quieter in the coming weeks.

Oil Price

Looking at the oil markets, the price of Brent crude has been rising in recent sessions, but appears to have settled around $73-$74 a barrel.

According to Bloomberg analysis of the market, oil has been trading in a narrow range between $70 and $75 a barrel in recent months. However this is down significantly from the $90+ highest seen earlier in the year.

Prices are expected to remain on the weaker side, with analysts expecting a glut next year due to lower demand and burgeoning supplies.

Brent traded near $74 a barrel after rising almost 5% last week.

“Crude has been caught in a tight range since mid-October, with prices trapped between OPEC+ supply curbs and a dour outlook in China,” Bloomberg analysts said.

“Traders are also uncertain about what the outlook for a Trump presidency will mean for prices, with potential impacts of tariffs on global growth acting as a demand risk, but also tailwinds that include the threat of tighter enforcement of sanctions on Iran.”

This is how the prices could reflect at the pumps: