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Huge Petrol Price Cut in December

Huge Petrol Price Cut in December

Petrol prices could decrease by more than 70 cents a litre and the wholesale price of diesel could fall by about 50 cents on 3 December, the Solidarity Research Institute (SRI) said on Tuesday.

The expected decrease would send petrol prices lower than last year and will be the first time in five years that petrol is cheaper on an annual basis, the trade union said.

The December decrease will follow a 45 cents per litre cut on November 5.

Weaker Rand and falling oil prices

Paul Joubert, senior economic researcher at the SRI, said that the weaker Rand is counteracting a reduction in local fuel prices at present. 

The Rand traded at an average of R11.12 against the US dollar in October and in November, it has traded at an average of R11.14.

“Fortunately, international petroleum product prices, the other factor that determines local fuel prices, have so far continued to decline along with oil prices during the course of November,” Joubert said.

The price of Opec oil, which was US$86.29 a barrel in October, has averaged nearly 10% lower at US$77.67 a barrel in November so far, he added.

He indicated that, should the rand or oil prices experience large fluctuations between now and then, the fuel price adjustments in December could deviate significantly from this projection.

The Department of Energy will announce the final fuel price changes on 28 November.