Prices of petrol and diesel to be slashed next week: AA

Despite the volatile rand and concerns around shipping routes in the Red Sea, local fuel prices are expected to decrease when they are adjusted by the department of mineral resources & energy on Wednesday.

Commenting on unaudited data from the Central Energy Fund (CEF), the Automobile Association (AA) says the numbers are pointing to reductions in fuel prices across the board. 

According to the CEF’s figures, ULP95 petrol is expected to be lower by about 54c/l while ULP93 is set for a drop of about 39c/l. Diesel prices are expected to drop substantially by between 94c/l and R1.02c/l, while illuminating paraffin will decline by about 95c/l.

This past Wednesday oil prices stabilised with some major shippers resuming passage through the Red Sea and Suez Canal after continued attacks by Houthi rebels which pushed oil prices higher. However, the downward movement in the oil price remains the main driver behind the expected decreases. The average rand/US dollar exchange is playing a smaller role but is still contributing to the expected decreases.

“Though we are expecting fuel to be cheaper in January, we remain concerned about the overall high prices which impact on all consumers,” says the association. “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.”

The AA 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, given current geopolitical developments which have an effect 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,” it says. 

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