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Tuesday, July 16, 2024

CEF data points to fuel price drops in February

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Diesel and petrol prices are currently on track for further drops in February according to the latest information from the Central Energy Fund.

The fuel prices are determined by international prices and the rand-dollar exchange rate and are effected on the first Wednesday of every month.

The Department of Energy has stressed that the daily snapshots were not predictive and did not cover other potential changes, like slate levy adjustments or retail margin changes, which were determined by the department at the end of the month, taking all variables into account.

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The recent strong gains in the oil price and a weaker rand may put price cuts at risk.

Based on the latest oil and rand prices, these are the expected changes:

Petrol 93: decrease of 18 cents a litre;
Petrol 95: decrease of 25 cents a litre;
Diesel 0.05%: decrease 50 cents a litre;
Diesel 0.005%: decrease of 63 cents a litre;
Illuminating paraffin: decrease of 46 cents a litre.

Read also: Two suspected fuel thieves found dead near Transnet pipeline

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This could bring the Gauteng diesel price to below R21 for the first time since March. Russia’s invasion of Ukraine triggered a spike in oil prices since February.

Petrol is already back at pre-invasion levels.

However, gains in the oil price and the dollar before the end of the month could still thwart fuel price declines. On Tuesday, Brent rose by more than 2% to above $86 per barrel following stronger-than-expected Chinese economic growth data.

In addition, the rand came under pressure this week. After reaching R16.70/$ last week, on Tuesday it was trading around R17.20.

At the start of January, the petrol price (both 93 and 95 unleaded) was cut by R2.06 a litre, while diesel was lowered by between R2.69 and R2.81.

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