South African motorists can look forward to a slight fuel price reprieve in early February, and if oil continues to trade at its current levels then the picture for March could look even rosier.
But first, let’s take a look at what’s in store for next month. According to the Automobile Association, late-month data from the Central Energy Fund is pointing towards a price decrease of 13 cents a litre for 95 Unleaded petrol while 93 ULP and both grades of diesel are looking set for a four cent cut.
That would bring the price of a litre of 95 ULP down to R15.39 at the coast and R16.03 in the inland regions, where 93 ULP will decrease to around R15.80.
International oil prices have risen and fallen during the month of January, which is why the lower international oil prices that we’re currently seeing will only properly reflect in the March fuel price, assuming of course that the oil market does not recover during the month of February.
Brent crude was trading at a shade over $58 a barrel at the time of writing, its lowest level since October 2019, but the commodity tested the $70 mark earlier in January as tensions rose between the US and Iran in the early days of the month.
Although there was a gradual retreat after the initial spike, oil prices have fallen rapidly since mid-month on fears that the coronavirus outbreak will harm China’s economy and ultimately lead to lower demand for fuel, according to CNN.
The other side of the fuel price coin is the rand, of course, and this hasn’t been working in our favour with the currency having depreciated from just over R14 to the US dollar at the beginning of January, to levels closer to the R14.50 mark in recent days.
It is believed that the upcoming Budget Speech and fears of a Moody’s downgrade are currently weighing on the currency.
Tito Mboweni’s Budget Speech is also likely to bring bad news for fuel prices, in the form of increased taxes that would take effect from the beginning of April. – IOL Motoring