Fuel price set to drop by R1 a litre

Motorists will rejoice at another petrol and diesel price reduction.
Motorists will rejoice at another petrol and diesel price reduction.

The new year will kick off with good news for motorists. This is according to the Automobile Association (AA), which says that unaudited month-end fuel price data released by the Central Energy Fund is showing a substantial drop across the board.

"Petrol is showing a reduction of around R1.00 a litre, with diesel down by R1.30 and illuminating paraffin dropping by R1.22," the AA says. Should this decrease materialise it will amount to a more than R2 decrease in the fuel price since the beginning of December, bringing much-needed relief to consumers battered by considerable increases throughout the year.

"The main driver of these reductions has been sagging international petroleum prices, spurred on by the USA which is trending towards becoming a nett exporter of oil. Should this ever come to pass, the power of the OPEC nations to influence petroleum prices would be reduced considerably, leading to increased oil price stability.

"However, the Association says that such scenarios will play out over the longer term, and that South Africans should be more concerned with short-term effects such as the Rand/US dollar exchange rate. "2018 has shown just how vulnerable South Africa is to exchange rate volatility, and our key message to government is to work towards stabilising the economy and managing government debt," the AA comments.

"Our outlook for 2019 is that South Africa's economic fundamentals and investor confidence which influences the Rand will be the biggest factors affecting fuel prices," the Association concludes.

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