Motorists tracking the daily recoveries in fuel prices should brace for a volatile ride into January 2025, with petrol and diesel prices fluctuating between potential increases and decreases as the rand and global oil prices shift.<\/p>\n\n\n\n
After starting the month in negative territory\u2014showing an under-recovery, thus a potential price hike for January\u2014these have turned somewhat thanks to a stronger rand\/dollar exchange rate and oil being range-bound.<\/p>\n\n\n\n
The latest data from the Central Energy Fund shows that Petrol 95 has a small over-recovery of 2 cents per litre, while Petrol 93 is still sitting with an under-recovery of 5 cents per litre.<\/p>\n\n\n\n
Similarly, diesel 0.05% is pointing to a tiny 1 cent per litre cut, and diesel 0.005% is showing a potential 2 cent per litre hike.<\/p>\n\n\n\n
The recoveries are on the edge both ways, meaning any fluctuations in the exchange rate or global oil prices in the next two weeks or so<\/strong> could push prices either way<\/strong>.<\/p>\n\n\n\n These are the current projections:<\/p>\n\n\n\n The more positive news in the data is that the trend is pointing towards a cut, and that diesel prices especially have shown a much bigger reduction in the under-recovery from the beginning of the month.<\/p>\n\n\n\n This is largely thanks to the rand strengthening against the US dollar, pushing back below R18.00\/$ and heading toward the R17.60\/$ levels seen before it crashed out along with other emerging market currencies after the 2024 US elections.<\/p>\n\n\n\n The stronger rand was driven by better-than-expected inflation data on Wednesday, as well as a weaker dollar due to higher US Treasury yields, according to Citadel Global director Bianca Botes.<\/p>\n\n\n\n Markets are also waiting for a likely 25 basis point cut by the US Fed later this month\u2014a move supported by US inflation data.<\/p>\n\n\n\n In South Africa, consumer inflation came in at 2.9% in November, up only 0.1 percentage points from October, beating market expectations of a higher climb to 3.1%.<\/p>\n\n\n\n Looking ahead, economists expect inflation to continue to edge higher over the coming months, but likely remain below the South African Reserve Bank’s 4.5% target mid-point.<\/p>\n\n\n\n A 25bp rate cut in the US, meanwhile, will extend the US\/SA interest rate differential, which should support a stronger rand.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n Prices are expected to remain on the weaker side, with analysts expecting a glut next year due to lower demand and burgeoning supplies.<\/p>\n\n\n\n Botes noted that oil is also holding steady after recent gains amid potential new US sanctions on Russia and Iran.<\/p>\n\n\n\n Analysts said that the direction of oil will hinge on China’s economic prospects, with a potential economic stimulus plan boosting demand and thus raising prices. However, if this does not materialise, price pressure could remain.<\/p>\n\n\n\n In the near-term, however, a few more data releases are expected which could impact pricing, though it is unlikely to move outside its current range.<\/p>\n\n\n\n\n
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