Fuel prices are expected to go down in January.
Experts said the decrease in price was expected due to a drop in the price of Brent crude oil for most of December.
Layton Beard, spokesperson for the AA, said South African motorists can expect significant fuel price reductions to kick off 2024.
“According to the data, ULP93 will decrease by around 68 cents/litre, and ULP95 will decrease by 82 cents a litre.
“Diesel is set to decrease considerably by around R1.50/ litre with illuminating paraffin also decreasing by around R1.42/litre. The forecast reductions in the wholesale price of diesel will bring this fuel cost down to around R20.32/litre inland, a price lower than the same time last year.”
Beard added that the expected reductions can be attributed to the significantly lower international product prices.
“While the rand has not been performing well against the US dollar, the international price of Brent crude oil has played the most significant role in the predicted drop.
“These decreases will go a long way to alleviating the fuel price burden and its associated impact on other prices felt by millions of South Africans.”
Professor Irrshad Kaseeram, from the University of Zululand’s Economics Department, said crude oil has been trending downwards to just over $80 (about R1 470) a barrel.
“Our exchange rate has been stable at around R18.65 per $1 in 2024. Hence if there are no shocks to the South African or global economy, we are set for further decreases in petrol and diesel prices to around 70 cents and R1.38 respectively.”
Kaseeram added that the bigger expected fall in diesel price bodes well for the trucking industry. “It will also lead to a decline in the inflation rate, especially food price inflation. This good news should hold for at least the first quarter of 2024.”
Professor Bonke Dumisa, an independent economic analyst, said: “The price of Brent crude oil has been hovering around $72 or $73 a barrel and this is significantly lower than the over $80 a barrel which we saw this year. So we should expect a decrease in fuel next week.”
Johann Els, Old Mutual Group chief economist, said he expected fuel prices to continue to be lower in 2024.
“Average international oil prices will likely settle around $70 to $75 per barrel in 2024.
“The rand exchange rate will likely also be markedly stronger in 2024 as the US dollar weakens on the back of US rate cuts expected in 2024.
“The combination of lower oil prices and a stronger rand means that petrol prices should at least not go up significantly in 2024 – and might actually be reduced more than what most people expect.”
The Mercury