Fuel Price Relief Brings Festive Cheer for South African Motorists
As the festive season approaches, South African motorists have reason to celebrate—despite minor price hikes in November and December, fuel costs are set to be significantly lower than this time last year.
Projections for December 2024 show that petrol prices will be more than R2 lower per litre compared to December 2023, while diesel prices could drop by nearly R3 per litre. These reductions offer welcome financial relief to those planning holiday travels amid rising seasonal expenses.
In December 2023, South Africans paid R23.25 per litre for 95-octane petrol and R21.99 per litre for diesel (0.005%). By December 2024, prices are expected to fall to R21.35 for petrol and R19.27 for diesel, marking substantial savings of about R2 and R2.70 per litre, respectively.
For drivers of South Africa’s popular 60.4-litre tank vehicles, these price cuts equate to potential savings of around R115 per tank for petrol and R164 for diesel, according to analysis by BusinessTech.
Izak Odendaal, an investment strategist at Old Mutual Wealth, points out that reduced oil prices, and by extension lower fuel costs, have played a key role in stabilizing inflation this year. This trend has not gone unnoticed by the South African Reserve Bank, which considers fuel prices in its interest rate decisions. For many households, lower fuel costs ease financial strain at a time when holiday expenses typically climb.
The Central Energy Fund (CEF) is set to release the final official December fuel prices at the end of November, with optimistic projections fueling anticipation for more affordable holiday journeys.
This year’s trend of falling fuel prices has been steady, supported by modest month-to-month adjustments. Data from the CEF highlights the role of global oil markets and currency fluctuations in shaping local prices. For example, while petrol prices showed minor gains in October, global factors kept overall prices low, with the rand’s stabilization following recent political events further reducing price pressures.
The local currency has been bolstered by encouraging domestic reforms, the establishment of a Government of National Unity, and an end to load shedding. Despite these advances, the rand remains weaker against the U.S. dollar than last year, though stronger in recent months.
A key factor behind the fuel price relief has been persistently low global oil prices. Economic challenges, particularly in China, have curbed demand, and oil producers, including OPEC, have struggled to cut production enough to offset this decline. Crude oil prices, which reached around $94 per barrel earlier this year, have since dropped to approximately $74, translating into lower fuel costs for South African consumers.
For South Africans on the road, these reductions bring much-needed savings just in time for the festive season.
BT
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