However, after a number of increases in recent months and despite the volatile rand and concerns around shipping routes in the Red Sea, South African fuel prices decreased on Wednesday, providing some reprieve.
The petrol (93 ULP and LRP) price dropped by 62c/ℓ, while 95 ULP and LRP dropped by 76c/ℓ. The diesel price was cut by 118,32/ℓ (0,05% sulphur) and 126,32/ℓ (0,005% sulphur).
The wholesale price of illuminating paraffin fell by 93c/ℓ. The maximum LP gas retail price, however, increased by 11c/kg.
According to the Automobile Association (AA), international oil prices have stabilised as some major shippers resumed passage through the Red Sea following attacks by rebels from Yemen, which had earlier pushed oil prices higher.
“Although we are expecting fuel to be cheaper in January, we remain concerned about the overall high prices that impact all consumers. Despite the recent decreases, petrol prices will still be higher than they were in January 2023, while diesel prices will be marginally lower than a year ago. 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 said.
The AA further said while 2024 was starting on a positive note for consumers, it was still too early to determine if the trend towards lower prices would continue, especially given current geopolitical developments that effected 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,” the association said.
Commenting on the decreases in fuel prices, Agbiz chief economist Wandile Sihlobo said the more than R1/ℓ drop in the diesel price, especially, was a positive development.
“Although this is a relatively quiet period in the agriculture industry, with most summer crop regions having completed their planting, the decline in the diesel price will still benefit the agribusinesses that transport agricultural products across the country.
“More than 70% of South Africa’s grains and oilseeds rely on roads (as well as a large share of other products). Therefore, the decrease in fuel prices is a positive development and bodes well for food prices.”