Petrol due to drop more than 30c a litre in December
The AA says the recent spike in the international prices of refined fuels ends a months-long price decline
The price of petrol in SA is set to drop by up to 36 cents a litre on December 2 while diesel is likely to see a four cent drop.
This is according to the AA, which expects a mixed fuel price outlook due to the strengthened rand being countered by a sharp spike in international oil prices.
Fuel prices are adjusted on the first Wednesday of every month. At the beginning of November the petrol price dropped 27c a litre and the wholesale price of diesel reduced 11c a litre for low sulphur diesel and 12c a litre for regular diesel.
The AA says illuminating paraffin is likely to increase almost 10c a litre, based on unaudited mid-month fuel price data released by the Central Energy Fund.
“It is quite unusual to have such a spread of price outlooks as is currently the case,” the AA says.
The association says the recent spike in the international prices of refined fuels ends a month-long price decline. The international price of diesel shot up by nearly 20% between November 2 and November 11 before pulling back slightly, while petrol was up more than 15%.
“Fortunately, the rand has fended off most of these increases, and has appreciated strongly against the US dollar, dipping below R15.50 to the dollar on November 10.”
The Association says that the currency and oil price fluctuations were attributable to world consumption rebounding faster than production, and what it called the ‘background noise’ around the US election of Joe Biden as President.
It also says that optimism in the wake of the announcement of a Covid-19 vaccine was being countered by jitters over renewed lockdowns in Europe and the rapid spread of Covid-19 in the US.
“Under the circumstances, oil prices and the rand/dollar exchange rate remain as stable as can be expected.”
The AA says the huge drops — and equally large rebounds — in fuel prices over the past six months seemed to have worked themselves out of the system, but warned that nothing could be taken for granted.
“With the SA economy in its current fragile state, fuel users will be among the first to feel any economic shocks,” it says.
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