South African motorists could see a significant reduction in fuel prices in December 2023. Diesel users are particularly poised for a notable decrease, with early indicators suggesting a drop of around R1.80 per litre. Petrol prices, though less predictable, are also expected to fall, potentially ranging between 60 cents and R1 per litre, contingent on the persistence of current trends.
As per IOL Motoring, the Central Energy Fund’s latest data provides a cautiously optimistic outlook for December. However, experts caution against premature conclusions, emphasising the unpredictability of fuel prices.
The anticipated decrease in diesel prices, potentially nearing R2 per litre, is a welcomed prospect, given its broader implications for transport costs and inflation.
Also read: Rising fuel costs in South Africa outpace inflation rates
It’s important to note that despite these potential decreases, diesel prices have been, in historical terms, very elevated. In the three months from August to October, South African diesel prices surged by R5.40, only to drop by 85 cents in November.
Currently, the wholesale price for 500 parts per million (ppm) diesel stands at R23.44 at the coast and R24.16 inland, while 50 ppm diesel is slightly higher. Retail prices, which vary between outlets, are typically about R2 higher than these figures.
Similarly, 95 Unleaded petrol is currently priced at R23.18 at the coast and R23.90 inland, with 93 Unleaded slightly higher.
The potential for December’s price cuts stems partly from a stronger rand and lower global oil prices. As of 7 November, Brent crude oil hovered around $85, a decrease from last month’s average of $88.7, which influenced current fuel prices. The rand’s favourable exchange rate, currently at R18.36, also plays a crucial role in this equation.
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However, it’s important to remain cautious. The fuel price forecast for December is not guaranteed, as fluctuations in global oil prices and the rand’s value could shift the landscape significantly.
The Department of Mineral Resources and Energy is set to announce the official petrol and diesel price adjustments early next month, with the new prices expected to come into effect on Wednesday, 4 December.
South Africans are hopeful for these reductions, but the capricious nature of fuel pricing calls for a measured approach to expectations.
As the end of November approaches, all eyes will be on the evolving economic indicators that will ultimately determine the extent of relief at the pumps.
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