The New Year appears to be starting on a happy note for motorists with the price of fuel likely to drop quite significantly next week, although this trend is not guaranteed to continue as the year moves on.

“Despite the volatile Rand and concerns around shipping routes in the Red Sea, local fuel prices are still expected to decrease when they are adjusted by the Department of Mineral Resources and Energy next Wednesday,” says the Automobile Association (AA). 

According to figures from the Central Energy Fund (CEF), ULP95 petrol is expected to be lower by around 54 c/ litre while ULP93 is set for a drop of around 39 c/litre. Diesel prices are expected to drop substantially by between 94 c/litre and R1,02 c/litre.

On Wednesday oil prices stabilised with some major shippers resuming passage following continued attacks which pushed oil prices higher. However, the downward movement in international product prices – oil prices – remains the main driver behind the expected decreases. The average Rand/US dollar exchange is playing a smaller role but is still contributing the expected decreases.

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“Although we are expecting fuel to be cheaper in January, we remain concerned about the overall high prices which impact on all consumers. If the expected decreases are realised, petrol prices will still be higher than they were in January 2023, but diesel prices will be marginally cheaper than at the same time. We must see all of this in the context of consumers who are still recovering from steep fuel price hikes in September and October,” says the AA.

The AA further says while 2024 is starting on a positive note for consumers, it’s still too early to determine if the trend to lower prices will continue, especially given current geo-political developments which impact on international oil prices.

“For this reason, a sustainable solution to mitigating rising fuel costs is still necessary and until that solution is found, citizens will be at the mercy of fuel price hikes. We again call on government to urgently initiate a transparent review of the fuel pricing structure to seek this solution,” says the Association.

The Association says changes to this data are expected before the formal announcement by the Department of Mineral Resources and Energy (DMRE) ahead of Wednesday’s adjustment. However, it says any relief at this stage is welcome.

Colin Windell

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